Correlation Between Grupo Simec and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and ArcelorMittal 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 ArcelorMittal 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 ArcelorMittal SA, you can compare the effects of market volatilities on Grupo Simec and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and ArcelorMittal.
Diversification Opportunities for Grupo Simec and ArcelorMittal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and ArcelorMittal is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of Grupo Simec i.e., Grupo Simec and ArcelorMittal go up and down completely randomly.
Pair Corralation between Grupo Simec and ArcelorMittal
Considering the 90-day investment horizon Grupo Simec SAB is expected to under-perform the ArcelorMittal. In addition to that, Grupo Simec is 1.53 times more volatile than ArcelorMittal SA. It trades about -0.01 of its total potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.16 per unit of volatility. If you would invest 2,150 in ArcelorMittal SA on September 14, 2024 and sell it today you would earn a total of 389.00 from holding ArcelorMittal SA or generate 18.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 96.49% |
Values | Daily Returns |
Grupo Simec SAB vs. ArcelorMittal SA
Performance |
Timeline |
Grupo Simec SAB |
ArcelorMittal SA |
Grupo Simec and ArcelorMittal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Simec and ArcelorMittal
The main advantage of trading using opposite Grupo Simec and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.Grupo Simec vs. Fortitude Gold Corp | Grupo Simec vs. New Gold | Grupo Simec vs. Galiano Gold | Grupo Simec vs. GoldMining |
ArcelorMittal vs. ArcelorMittal SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings | ArcelorMittal vs. HUMANA INC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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