Correlation Between Service Properties and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Service Properties 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 Service Properties and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Service Properties Trust and Grupo Simec SAB, you can compare the effects of market volatilities on Service Properties 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 Service Properties with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Service Properties and Grupo Simec.
Diversification Opportunities for Service Properties and Grupo Simec
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Service and Grupo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Service Properties Trust 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 Service Properties 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 Service Properties Trust 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 Service Properties i.e., Service Properties and Grupo Simec go up and down completely randomly.
Pair Corralation between Service Properties and Grupo Simec
Considering the 90-day investment horizon Service Properties Trust is expected to under-perform the Grupo Simec. But the stock apears to be less risky and, when comparing its historical volatility, Service Properties Trust is 1.21 times less risky than Grupo Simec. The stock trades about -0.09 of its potential returns per unit of risk. The Grupo Simec SAB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,100 in Grupo Simec SAB on September 3, 2024 and sell it today you would lose (411.00) from holding Grupo Simec SAB or give up 13.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.68% |
| Values | Daily Returns |
Service Properties Trust vs. Grupo Simec SAB
Performance |
| Timeline |
| Service Properties Trust |
| Grupo Simec SAB |
Service Properties and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Service Properties and Grupo Simec
The main advantage of trading using opposite Service Properties and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Service Properties 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.| Service Properties vs. Grupo Simec SAB | Service Properties vs. Grocery Outlet Holding | Service Properties vs. United States Steel | Service Properties vs. Insteel Industries |
| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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