Correlation Between Grupo Simec and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Globalfoundries at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grupo Simec and Globalfoundries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Simec SAB and Globalfoundries, you can compare the effects of market volatilities on Grupo Simec and Globalfoundries and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grupo Simec with a short position of Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Globalfoundries.
Diversification Opportunities for Grupo Simec and Globalfoundries
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and Globalfoundries is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and Grupo Simec is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grupo Simec SAB are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Grupo Simec i.e., Grupo Simec and Globalfoundries go up and down completely randomly.
Pair Corralation between Grupo Simec and Globalfoundries
Considering the 90-day investment horizon Grupo Simec SAB is expected to under-perform the Globalfoundries. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Simec SAB is 1.15 times less risky than Globalfoundries. The stock trades about -0.03 of its potential returns per unit of risk. The Globalfoundries is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,861 in Globalfoundries on September 1, 2024 and sell it today you would lose (536.00) from holding Globalfoundries or give up 11.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.3% |
| Values | Daily Returns |
Grupo Simec SAB vs. Globalfoundries
Performance |
| Timeline |
| Grupo Simec SAB |
| Globalfoundries |
Grupo Simec and Globalfoundries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Globalfoundries
The main advantage of trading using opposite Grupo Simec and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Globalfoundries can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Globalfoundries will offset losses from the drop in Globalfoundries' long position.| Grupo Simec vs. Fortitude Gold Corp | Grupo Simec vs. New Gold | Grupo Simec vs. Galiano Gold | Grupo Simec vs. GoldMining |
| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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