Correlation Between Grupo Simec and Huadi International
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Huadi International 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 Huadi International 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 Huadi International Group, you can compare the effects of market volatilities on Grupo Simec and Huadi International 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 Huadi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Huadi International.
Diversification Opportunities for Grupo Simec and Huadi International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and Huadi is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Huadi International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadi International 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 Huadi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadi International has no effect on the direction of Grupo Simec i.e., Grupo Simec and Huadi International go up and down completely randomly.
Pair Corralation between Grupo Simec and Huadi International
Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 0.7 times more return on investment than Huadi International. However, Grupo Simec SAB is 1.42 times less risky than Huadi International. It trades about -0.02 of its potential returns per unit of risk. Huadi International Group is currently generating about -0.03 per unit of risk. If you would invest 3,578 in Grupo Simec SAB on December 5, 2024 and sell it today you would lose (1,029) from holding Grupo Simec SAB or give up 28.76% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 84.87% |
Values | Daily Returns |
Grupo Simec SAB vs. Huadi International Group
Performance |
Timeline |
Grupo Simec SAB |
Huadi International |
Grupo Simec and Huadi International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Simec and Huadi International
The main advantage of trading using opposite Grupo Simec and Huadi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Huadi International 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 Huadi International will offset losses from the drop in Huadi International's long position.Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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