Correlation Between Dow and Grupo Simec

Can any of the company-specific risk be diversified away by investing in both Dow 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 Dow and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dow Inc and Grupo Simec SAB, you can compare the effects of market volatilities on Dow 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 Dow with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow and Grupo Simec.

Diversification Opportunities for Dow and Grupo Simec

-0.13

Correlation Coefficient

Dow  Grupo Simec

Good diversification

The 3 months correlation between Dow and Grupo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dow Inc 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 Dow 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 Dow Inc 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 Dow i.e., Dow and Grupo Simec go up and down completely randomly.

Pair Corralation between Dow and Grupo Simec

Considering the 90-day investment horizon Dow Inc is expected to under-perform the Grupo Simec. In addition to that, Dow is 2.48 times more volatile than Grupo Simec SAB. It trades about -0.1 of its total potential returns per unit of risk. Grupo Simec SAB is currently generating about 0.04 per unit of volatility. If you would invest  2,670  in Grupo Simec SAB on May 7, 2025 and sell it today you would earn a total of  75.00  from holding Grupo Simec SAB or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dow Inc  vs.  Grupo Simec SAB

Dow Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dow Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Grupo Simec SAB

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Simec SAB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Grupo Simec is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Dow and Grupo Simec

The main advantage of trading using opposite Dow and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow 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.

The idea behind Dow Inc and Grupo Simec SAB 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..