Correlation Between Grupo Simec and Osisko Gold

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

Diversification Opportunities for Grupo Simec and Osisko Gold

-0.38

Correlation Coefficient

Grupo Simec  Osisko Gold

Very good diversification

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

Pair Corralation between Grupo Simec and Osisko Gold

Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 1.09 times more return on investment than Osisko Gold. However, Grupo Simec is 1.09 times more volatile than Osisko Gold Ro. It trades about 0.06 of its potential returns per unit of risk. Osisko Gold Ro is currently generating about -0.1 per unit of risk. If you would invest  2,625  in Grupo Simec SAB on September 5, 2024 and sell it today you would earn a total of  64.00  from holding Grupo Simec SAB or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Grupo Simec SAB  vs.  Osisko Gold Ro

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

Osisko Gold Ro

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Gold Ro are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Osisko Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Simec and Osisko Gold

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

The idea behind Grupo Simec SAB and Osisko Gold Ro 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.