Correlation Between Grupo Simec and Cleantech Power
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Cleantech Power 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 Cleantech Power 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 Cleantech Power Corp, you can compare the effects of market volatilities on Grupo Simec and Cleantech Power 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 Cleantech Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Cleantech Power.
Diversification Opportunities for Grupo Simec and Cleantech Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and Cleantech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Cleantech Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleantech Power Corp 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 Cleantech Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleantech Power Corp has no effect on the direction of Grupo Simec i.e., Grupo Simec and Cleantech Power go up and down completely randomly.
Pair Corralation between Grupo Simec and Cleantech Power
Considering the 90-day investment horizon Grupo Simec SAB is expected to under-perform the Cleantech Power. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Simec SAB is 29.08 times less risky than Cleantech Power. The stock trades about 0.0 of its potential returns per unit of risk. The Cleantech Power Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Cleantech Power Corp on August 31, 2024 and sell it today you would lose (0.41) from holding Cleantech Power Corp or give up 41.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 84.99% |
| Values | Daily Returns |
Grupo Simec SAB vs. Cleantech Power Corp
Performance |
| Timeline |
| Grupo Simec SAB |
| Cleantech Power Corp |
Grupo Simec and Cleantech Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Cleantech Power
The main advantage of trading using opposite Grupo Simec and Cleantech Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Cleantech Power 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 Cleantech Power will offset losses from the drop in Cleantech Power'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 |
| Cleantech Power vs. Legacy Education | Cleantech Power vs. Apple Inc | Cleantech Power vs. NVIDIA | Cleantech Power vs. Microsoft |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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