Correlation Between Grupo Simec and Perceptive Capital

Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Perceptive Capital 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 Perceptive Capital 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 Perceptive Capital Solutions, you can compare the effects of market volatilities on Grupo Simec and Perceptive Capital 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 Perceptive Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Perceptive Capital.

Diversification Opportunities for Grupo Simec and Perceptive Capital

-0.29

Correlation Coefficient

Grupo Simec  Perceptive Capital

Very good diversification

The 3 months correlation between Grupo and Perceptive is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Perceptive Capital Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perceptive Capital 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 Perceptive Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perceptive Capital has no effect on the direction of Grupo Simec i.e., Grupo Simec and Perceptive Capital go up and down completely randomly.

Pair Corralation between Grupo Simec and Perceptive Capital

Considering the 90-day investment horizon Grupo Simec is expected to generate 1.22 times less return on investment than Perceptive Capital. In addition to that, Grupo Simec is 20.33 times more volatile than Perceptive Capital Solutions. It trades about 0.01 of its total potential returns per unit of risk. Perceptive Capital Solutions is currently generating about 0.14 per unit of volatility. If you would invest  1,013  in Perceptive Capital Solutions on December 29, 2024 and sell it today you would earn a total of  17.00  from holding Perceptive Capital Solutions or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Grupo Simec SAB  vs.  Perceptive Capital Solutions

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.

Perceptive Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perceptive Capital Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Perceptive Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Grupo Simec and Perceptive Capital

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

The idea behind Grupo Simec SAB and Perceptive Capital Solutions 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.