Correlation Between Sony and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Sony and Grupo Simec 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 Sony and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sony Group and Grupo Simec SAB, you can compare the effects of market volatilities on Sony and Grupo Simec 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 Sony with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sony and Grupo Simec.
Diversification Opportunities for Sony and Grupo Simec
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sony and Grupo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sony Group and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB and Sony 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 Sony Group are associated (or correlated) with Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of Sony i.e., Sony and Grupo Simec go up and down completely randomly.
Pair Corralation between Sony and Grupo Simec
Assuming the 90 days trading horizon Sony Group is expected to generate 1.79 times more return on investment than Grupo Simec. However, Sony is 1.79 times more volatile than Grupo Simec SAB. It trades about 0.06 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.02 per unit of risk. If you would invest 31,580 in Sony Group on September 12, 2024 and sell it today you would earn a total of 12,620 from holding Sony Group or generate 39.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.73% |
| Values | Daily Returns |
Sony Group vs. Grupo Simec SAB
Performance |
| Timeline |
| Sony Group |
| Grupo Simec SAB |
Sony and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sony and Grupo Simec
The main advantage of trading using opposite Sony and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sony position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec's long position.The idea behind Sony Group and Grupo Simec SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Grupo Simec vs. CEMEX SAB de | Grupo Simec vs. Grupo Financiero Banorte | Grupo Simec vs. Alfa SAB de | Grupo Simec vs. Fomento Econmico Mexicano |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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