Correlation Between Grupo Simec and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Hertz Global 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 Hertz Global 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 Hertz Global Hldgs, you can compare the effects of market volatilities on Grupo Simec and Hertz Global 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 Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Hertz Global.
Diversification Opportunities for Grupo Simec and Hertz Global
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Hertz is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Hertz Global Hldgs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Hldgs 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 Hertz Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hertz Global Hldgs has no effect on the direction of Grupo Simec i.e., Grupo Simec and Hertz Global go up and down completely randomly.
Pair Corralation between Grupo Simec and Hertz Global
Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 0.64 times more return on investment than Hertz Global. However, Grupo Simec SAB is 1.56 times less risky than Hertz Global. It trades about -0.01 of its potential returns per unit of risk. Hertz Global Hldgs is currently generating about -0.03 per unit of risk. If you would invest 3,138 in Grupo Simec SAB on November 9, 2024 and sell it today you would lose (505.00) from holding Grupo Simec SAB or give up 16.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.65% |
| Values | Daily Returns |
Grupo Simec SAB vs. Hertz Global Hldgs
Performance |
| Timeline |
| Grupo Simec SAB |
| Hertz Global Hldgs |
Grupo Simec and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Hertz Global
The main advantage of trading using opposite Grupo Simec and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Hertz Global 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 Hertz Global will offset losses from the drop in Hertz Global's long position.| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
| Hertz Global vs. Hertz Global Holdings | Hertz Global vs. Avis Budget Group | Hertz Global vs. Herc Holdings | Hertz Global vs. Frontier Group Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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