Correlation Between Grupo Simec and GMS
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and GMS 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 GMS 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 GMS Inc, you can compare the effects of market volatilities on Grupo Simec and GMS 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 GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and GMS.
Diversification Opportunities for Grupo Simec and GMS
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and GMS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Grupo Simec i.e., Grupo Simec and GMS go up and down completely randomly.
Pair Corralation between Grupo Simec and GMS
Considering the 90-day investment horizon Grupo Simec is expected to generate 2.65 times less return on investment than GMS. In addition to that, Grupo Simec is 1.16 times more volatile than GMS Inc. It trades about 0.08 of its total potential returns per unit of risk. GMS Inc is currently generating about 0.25 per unit of volatility. If you would invest 9,094 in GMS Inc on September 2, 2024 and sell it today you would earn a total of 941.00 from holding GMS Inc or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Simec SAB vs. GMS Inc
Performance |
| Timeline |
| Grupo Simec SAB |
| GMS Inc |
Grupo Simec and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and GMS
The main advantage of trading using opposite Grupo Simec and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's long position.| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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