Correlation Between Grupo Simec and Barclays PLC
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Barclays PLC 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 Barclays PLC 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 Barclays PLC, you can compare the effects of market volatilities on Grupo Simec and Barclays PLC 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 Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Barclays PLC.
Diversification Opportunities for Grupo Simec and Barclays PLC
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and Barclays is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Barclays PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC 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 Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC has no effect on the direction of Grupo Simec i.e., Grupo Simec and Barclays PLC go up and down completely randomly.
Pair Corralation between Grupo Simec and Barclays PLC
Assuming the 90 days trading horizon Grupo Simec SAB is expected to under-perform the Barclays PLC. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Simec SAB is 1.52 times less risky than Barclays PLC. The stock trades about -0.06 of its potential returns per unit of risk. The Barclays PLC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 30,500 in Barclays PLC on December 1, 2024 and sell it today you would earn a total of 1,003 from holding Barclays PLC or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Simec SAB vs. Barclays PLC
Performance |
| Timeline |
| Grupo Simec SAB |
| Barclays PLC |
Grupo Simec and Barclays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Barclays PLC
The main advantage of trading using opposite Grupo Simec and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Barclays PLC 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.| Grupo Simec vs. Capital One Financial | Grupo Simec vs. Grupo Carso SAB | Grupo Simec vs. Prudential Financial | Grupo Simec vs. Taiwan Semiconductor Manufacturing |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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