Correlation Between ArcelorMittal and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Grupo Simec 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 ArcelorMittal and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA ADR and Grupo Simec SAB, you can compare the effects of market volatilities on ArcelorMittal and Grupo Simec 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 ArcelorMittal with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Grupo Simec.
Diversification Opportunities for ArcelorMittal and Grupo Simec
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ArcelorMittal and Grupo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB and ArcelorMittal 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 ArcelorMittal SA ADR are associated (or correlated) with Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Grupo Simec go up and down completely randomly.
Pair Corralation between ArcelorMittal and Grupo Simec
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to under-perform the Grupo Simec. But the stock apears to be less risky and, when comparing its historical volatility, ArcelorMittal SA ADR is 2.01 times less risky than Grupo Simec. The stock trades about -0.01 of its potential returns per unit of risk. The Grupo Simec SAB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,316 in Grupo Simec SAB on January 20, 2024 and sell it today you would lose (216.00) from holding Grupo Simec SAB or give up 6.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 91.3% |
Values | Daily Returns |
ArcelorMittal SA ADR vs. Grupo Simec SAB
Performance |
Timeline |
ArcelorMittal SA ADR |
Grupo Simec SAB |
ArcelorMittal and Grupo Simec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ArcelorMittal and Grupo Simec
The main advantage of trading using opposite ArcelorMittal and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec's long position.ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO Holdings |
Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |