Correlation Between Allegheny Technologies and Grupo Simec

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

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

Diversification Opportunities for Allegheny Technologies and Grupo Simec

-0.35

Correlation Coefficient

Allegheny Technologies  Grupo Simec

Very good diversification

The 3 months correlation between Allegheny and Grupo is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo 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 Allegheny Technologies 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 Allegheny Technologies Incorporated 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 Allegheny Technologies i.e., Allegheny Technologies and Grupo Simec go up and down completely randomly.

Pair Corralation between Allegheny Technologies and Grupo Simec

Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to under-perform the Grupo Simec. But the stock apears to be less risky and, when comparing its historical volatility, Allegheny Technologies Incorporated is 1.5 times less risky than Grupo Simec. The stock trades about -0.01 of its potential returns per unit of risk. The Grupo Simec SAB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,715  in Grupo Simec SAB on December 28, 2024 and sell it today you would lose (78.00) from holding Grupo Simec SAB or give up 2.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Allegheny Technologies Incorpo  vs.  Grupo Simec SAB

Allegheny Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allegheny Technologies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Allegheny Technologies is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Grupo Simec SAB

Risk-Adjusted Performance

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 newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Allegheny Technologies and Grupo Simec

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

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.