Correlation Between Grupo Simec and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Melbana Energy 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 Melbana Energy 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 Melbana Energy Limited, you can compare the effects of market volatilities on Grupo Simec and Melbana Energy 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 Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Melbana Energy.
Diversification Opportunities for Grupo Simec and Melbana Energy
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grupo and Melbana is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy 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 Melbana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melbana Energy has no effect on the direction of Grupo Simec i.e., Grupo Simec and Melbana Energy go up and down completely randomly.
Pair Corralation between Grupo Simec and Melbana Energy
Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 0.08 times more return on investment than Melbana Energy. However, Grupo Simec SAB is 13.26 times less risky than Melbana Energy. It trades about 0.04 of its potential returns per unit of risk. Melbana Energy Limited is currently generating about -0.32 per unit of risk. If you would invest 2,689 in Grupo Simec SAB on October 15, 2024 and sell it today you would earn a total of 22.00 from holding Grupo Simec SAB or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Grupo Simec SAB vs. Melbana Energy Limited
Performance |
| Timeline |
| Grupo Simec SAB |
| Melbana Energy |
Grupo Simec and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Melbana Energy
The main advantage of trading using opposite Grupo Simec and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Melbana Energy 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 Melbana Energy will offset losses from the drop in Melbana Energy's long position.| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
| Melbana Energy vs. Grupo Simec SAB | Melbana Energy vs. ArcelorMittal SA ADR | Melbana Energy vs. Live Ventures | Melbana Energy vs. InfuSystems 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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