Correlation Between Grupo Simec and Industrias
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Industrias 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 Industrias 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 Industrias CH S, you can compare the effects of market volatilities on Grupo Simec and Industrias 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 Industrias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Industrias.
Diversification Opportunities for Grupo Simec and Industrias
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Industrias is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Industrias CH S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias CH S 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 Industrias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias CH S has no effect on the direction of Grupo Simec i.e., Grupo Simec and Industrias go up and down completely randomly.
Pair Corralation between Grupo Simec and Industrias
Assuming the 90 days trading horizon Grupo Simec SAB is not expected to generate positive returns. However, Grupo Simec SAB is 90.64 times less risky than Industrias. It waists most of its returns potential to compensate for thr risk taken. Industrias is generating about -0.01 per unit of risk. If you would invest 18,500 in Grupo Simec SAB on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Grupo Simec SAB or generate 0.0% 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. Industrias CH S
Performance |
| Timeline |
| Grupo Simec SAB |
| Industrias CH S |
Grupo Simec and Industrias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Industrias
The main advantage of trading using opposite Grupo Simec and Industrias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Industrias 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 Industrias will offset losses from the drop in Industrias' long position.| Grupo Simec vs. Enphase Energy, | Grupo Simec vs. The Home Depot | Grupo Simec vs. The Select Sector | Grupo Simec vs. Promotora y Operadora |
| Industrias vs. Grupo Simec SAB | Industrias vs. Grupo Financiero Inbursa | Industrias vs. Grupo Aeroportuario del | Industrias vs. Kimberly Clark de Mxico |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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