Correlation Between Grupo Simec and 91324PEQ1

Can any of the company-specific risk be diversified away by investing in both Grupo Simec and 91324PEQ1 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 91324PEQ1 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 UNH 53 15 FEB 30, you can compare the effects of market volatilities on Grupo Simec and 91324PEQ1 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 91324PEQ1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and 91324PEQ1.

Diversification Opportunities for Grupo Simec and 91324PEQ1

0.38

Correlation Coefficient

Grupo Simec  91324PEQ1

Weak diversification

The 3 months correlation between Grupo and 91324PEQ1 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and UNH 53 15 FEB 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNH 53 15 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 91324PEQ1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNH 53 15 has no effect on the direction of Grupo Simec i.e., Grupo Simec and 91324PEQ1 go up and down completely randomly.

Pair Corralation between Grupo Simec and 91324PEQ1

Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 6.47 times more return on investment than 91324PEQ1. However, Grupo Simec is 6.47 times more volatile than UNH 53 15 FEB 30. It trades about 0.0 of its potential returns per unit of risk. UNH 53 15 FEB 30 is currently generating about -0.01 per unit of risk. If you would invest  3,380  in Grupo Simec SAB on September 19, 2024 and sell it today you would lose (691.00) from holding Grupo Simec SAB or give up 20.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.81%
Values	Daily Returns

Grupo Simec SAB  vs.  UNH 53 15 FEB 30

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

UNH 53 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNH 53 15 FEB 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 91324PEQ1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Simec and 91324PEQ1

The main advantage of trading using opposite Grupo Simec and 91324PEQ1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, 91324PEQ1 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 91324PEQ1 will offset losses from the drop in 91324PEQ1's long position.

The idea behind Grupo Simec SAB and UNH 53 15 FEB 30 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.