Correlation Between Grupo Simec and Asure Software

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

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

Diversification Opportunities for Grupo Simec and Asure Software

-0.42

Correlation Coefficient

Grupo Simec  Asure Software

Very good diversification

The 3 months correlation between Grupo and Asure is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Grupo Simec 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 Simec SAB are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Grupo Simec i.e., Grupo Simec and Asure Software go up and down completely randomly.

Pair Corralation between Grupo Simec and Asure Software

Considering the 90-day investment horizon Grupo Simec SAB is expected to under-perform the Asure Software. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Simec SAB is 1.08 times less risky than Asure Software. The stock trades about 0.0 of its potential returns per unit of risk. The Asure Software is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  839.00  in Asure Software on September 3, 2024 and sell it today you would earn a total of  140.00  from holding Asure Software or generate 16.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.94%
Values	Daily Returns

Grupo Simec SAB  vs.  Asure Software

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

Asure Software

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Simec and Asure Software

The main advantage of trading using opposite Grupo Simec and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.

The idea behind Grupo Simec SAB and Asure Software 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.