Correlation Between Grupo Aeroportuario and Grupo Simec

Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario 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 Grupo Aeroportuario and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Aeroportuario del and Grupo Simec SAB, you can compare the effects of market volatilities on Grupo Aeroportuario 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 Grupo Aeroportuario with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Grupo Simec.

Diversification Opportunities for Grupo Aeroportuario and Grupo Simec

0.54

Correlation Coefficient

Grupo Aeroportuario  Grupo Simec

Very weak diversification

The 3 months correlation between Grupo and Grupo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del 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 Grupo Aeroportuario 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 Aeroportuario del 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 Grupo Aeroportuario i.e., Grupo Aeroportuario and Grupo Simec go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and Grupo Simec

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 0.79 times more return on investment than Grupo Simec. However, Grupo Aeroportuario del is 1.26 times less risky than Grupo Simec. It trades about 0.09 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about 0.0 per unit of risk. If you would invest  26,500  in Grupo Aeroportuario del on September 19, 2024 and sell it today you would earn a total of  863.00  from holding Grupo Aeroportuario del or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Grupo Aeroportuario del  vs.  Grupo Simec SAB

Grupo Aeroportuario del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Aeroportuario del has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Grupo Aeroportuario is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Grupo Simec SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Simec SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Grupo Simec is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Grupo Aeroportuario and Grupo Simec

The main advantage of trading using opposite Grupo Aeroportuario and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario 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 Grupo Aeroportuario del 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.