Correlation Between Grupo Simec and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Grocery Outlet 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 Grocery Outlet 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 Grocery Outlet Holding, you can compare the effects of market volatilities on Grupo Simec and Grocery Outlet 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 Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Grocery Outlet.
Diversification Opportunities for Grupo Simec and Grocery Outlet
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grupo and Grocery is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Grupo Simec i.e., Grupo Simec and Grocery Outlet go up and down completely randomly.
Pair Corralation between Grupo Simec and Grocery Outlet
Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 2.48 times more return on investment than Grocery Outlet. However, Grupo Simec is 2.48 times more volatile than Grocery Outlet Holding. It trades about 0.0 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.14 per unit of risk. If you would invest 2,643 in Grupo Simec SAB on November 27, 2024 and sell it today you would lose (59.00) from holding Grupo Simec SAB or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Grupo Simec SAB vs. Grocery Outlet Holding
Performance |
| Timeline |
| Grupo Simec SAB |
| Grocery Outlet Holding |
Grupo Simec and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Grocery Outlet
The main advantage of trading using opposite Grupo Simec and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet's long position.| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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