Correlation Between Grupo Simec and Pool
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Pool 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 Pool 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 Pool Corporation, you can compare the effects of market volatilities on Grupo Simec and Pool 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 Pool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Pool.
Diversification Opportunities for Grupo Simec and Pool
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Pool is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Pool Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pool 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 Pool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pool has no effect on the direction of Grupo Simec i.e., Grupo Simec and Pool go up and down completely randomly.
Pair Corralation between Grupo Simec and Pool
Considering the 90-day investment horizon Grupo Simec is expected to generate 1.28 times less return on investment than Pool. In addition to that, Grupo Simec is 1.06 times more volatile than Pool Corporation. It trades about 0.08 of its total potential returns per unit of risk. Pool Corporation is currently generating about 0.11 per unit of volatility. If you would invest 36,042 in Pool Corporation on September 1, 2024 and sell it today you would earn a total of 1,667 from holding Pool Corporation or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Simec SAB vs. Pool Corp.
Performance |
| Timeline |
| Grupo Simec SAB |
| Pool |
Grupo Simec and Pool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Pool
The main advantage of trading using opposite Grupo Simec and Pool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Pool 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 Pool will offset losses from the drop in Pool's long position.| Grupo Simec vs. Fortitude Gold Corp | Grupo Simec vs. New Gold | Grupo Simec vs. Galiano Gold | Grupo Simec vs. GoldMining |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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