Correlation Between Titan International and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Titan International 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 Titan International and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan International and Grupo Simec SAB, you can compare the effects of market volatilities on Titan International 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 Titan International with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan International and Grupo Simec.
Diversification Opportunities for Titan International and Grupo Simec
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Titan and Grupo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Titan International 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 Titan International 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 Titan International 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 Titan International i.e., Titan International and Grupo Simec go up and down completely randomly.
Pair Corralation between Titan International and Grupo Simec
Considering the 90-day investment horizon Titan International is expected to under-perform the Grupo Simec. But the stock apears to be less risky and, when comparing its historical volatility, Titan International is 1.15 times less risky than Grupo Simec. The stock trades about -0.04 of its potential returns per unit of risk. The Grupo Simec SAB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,479 in Grupo Simec SAB on August 29, 2024 and sell it today you would lose (902.00) from holding Grupo Simec SAB or give up 25.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.05% |
| Values | Daily Returns |
Titan International vs. Grupo Simec SAB
Performance |
| Timeline |
| Titan International |
| Grupo Simec SAB |
Titan International and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan International and Grupo Simec
The main advantage of trading using opposite Titan International and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan International 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.| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Terex | Titan International vs. Alamo Group |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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