Correlation Between Grupo Simec and ATT

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

Diversification Opportunities for Grupo Simec and ATT

0.55

Correlation Coefficient

Grupo Simec  ATT

Very weak diversification

The 3 months correlation between Grupo and ATT is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Grupo Simec i.e., Grupo Simec and ATT go up and down completely randomly.

Pair Corralation between Grupo Simec and ATT

Considering the 90-day investment horizon Grupo Simec SAB is expected to under-perform the ATT. In addition to that, Grupo Simec is 3.59 times more volatile than ATT Inc. It trades about -0.04 of its total potential returns per unit of risk. ATT Inc is currently generating about -0.11 per unit of volatility. If you would invest  2,090  in ATT Inc on October 10, 2024 and sell it today you would lose (113.00) from holding ATT Inc or give up 5.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.16%
Values	Daily Returns

Grupo Simec SAB  vs.  ATT Inc

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 latest uncertain performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

ATT Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ATT 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 ATT

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

The idea behind Grupo Simec SAB and ATT Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.