Correlation Between Grupo Simec and Mechel OAO
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Mechel OAO 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 Mechel OAO 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 Mechel OAO, you can compare the effects of market volatilities on Grupo Simec and Mechel OAO 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 Mechel OAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Mechel OAO.
Diversification Opportunities for Grupo Simec and Mechel OAO
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grupo and Mechel is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Mechel OAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechel OAO 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 Mechel OAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechel OAO has no effect on the direction of Grupo Simec i.e., Grupo Simec and Mechel OAO go up and down completely randomly.
Pair Corralation between Grupo Simec and Mechel OAO
If you would invest 2,650 in Grupo Simec SAB on September 12, 2024 and sell it today you would earn a total of 106.00 from holding Grupo Simec SAB or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Grupo Simec SAB vs. Mechel OAO
Performance |
| Timeline |
| Grupo Simec SAB |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Grupo Simec and Mechel OAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Mechel OAO
The main advantage of trading using opposite Grupo Simec and Mechel OAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Mechel OAO 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 Mechel OAO will offset losses from the drop in Mechel OAO's long position.| Grupo Simec vs. Nucor Corp | Grupo Simec vs. Steel Dynamics | Grupo Simec vs. ArcelorMittal SA ADR | Grupo Simec vs. Gerdau SA ADR |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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