Correlation Between Grupo Simec and U Power
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and U 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 U 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 U Power Limited, you can compare the effects of market volatilities on Grupo Simec and U 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 U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and U Power.
Diversification Opportunities for Grupo Simec and U Power
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and UCAR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited 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 U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of Grupo Simec i.e., Grupo Simec and U Power go up and down completely randomly.
Pair Corralation between Grupo Simec and U Power
Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 0.46 times more return on investment than U Power. However, Grupo Simec SAB is 2.19 times less risky than U Power. It trades about 0.08 of its potential returns per unit of risk. U Power Limited is currently generating about -0.19 per unit of risk. If you would invest 2,600 in Grupo Simec SAB on August 31, 2024 and sell it today you would earn a total of 89.00 from holding Grupo Simec SAB or generate 3.42% 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. U Power Limited
Performance |
| Timeline |
| Grupo Simec SAB |
| U Power Limited |
Grupo Simec and U Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and U Power
The main advantage of trading using opposite Grupo Simec and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, U 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 U Power will offset losses from the drop in U 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 |
| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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