Correlation Between Grupo Simec and WiMi Hologram

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

Diversification Opportunities for Grupo Simec and WiMi Hologram

0.16

Correlation Coefficient

Grupo Simec  WiMi Hologram

Average diversification

The 3 months correlation between Grupo and WiMi is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and WiMi Hologram Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiMi Hologram Cloud 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 WiMi Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiMi Hologram Cloud has no effect on the direction of Grupo Simec i.e., Grupo Simec and WiMi Hologram go up and down completely randomly.

Pair Corralation between Grupo Simec and WiMi Hologram

Considering the 90-day investment horizon Grupo Simec is expected to generate 51.89 times less return on investment than WiMi Hologram. But when comparing it to its historical volatility, Grupo Simec SAB is 3.36 times less risky than WiMi Hologram. It trades about 0.0 of its potential returns per unit of risk. WiMi Hologram Cloud is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  76.00  in WiMi Hologram Cloud on December 5, 2024 and sell it today you would earn a total of  1.00  from holding WiMi Hologram Cloud or generate 1.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.24%
Values	Daily Returns

Grupo Simec SAB  vs.  WiMi Hologram Cloud

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.

WiMi Hologram Cloud

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WiMi Hologram Cloud are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, WiMi Hologram demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Simec and WiMi Hologram

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

The idea behind Grupo Simec SAB and WiMi Hologram Cloud 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.