Correlation Between Grupo Carso and Air China
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and Air China 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 Carso and Air China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Carso SAB and Air China Limited, you can compare the effects of market volatilities on Grupo Carso and Air China 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 Carso with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Air China.
Diversification Opportunities for Grupo Carso and Air China
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and Air is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Air China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China Limited and Grupo Carso 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 Carso SAB are associated (or correlated) with Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China Limited has no effect on the direction of Grupo Carso i.e., Grupo Carso and Air China go up and down completely randomly.
Pair Corralation between Grupo Carso and Air China
Assuming the 90 days horizon Grupo Carso is expected to generate 1.86 times less return on investment than Air China. But when comparing it to its historical volatility, Grupo Carso SAB is 1.11 times less risky than Air China. It trades about 0.04 of its potential returns per unit of risk. Air China Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Air China Limited on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Air China Limited or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. Air China Limited
Performance |
| Timeline |
| Grupo Carso SAB |
| Air China Limited |
Grupo Carso and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Air China
The main advantage of trading using opposite Grupo Carso and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, Air China 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 Air China will offset losses from the drop in Air China's long position.| Grupo Carso vs. Cleanaway Waste Management | Grupo Carso vs. TAL Education Group | Grupo Carso vs. Major Drilling Group | Grupo Carso vs. STRAYER EDUCATION |
| Air China vs. Entravision Communications | Air China vs. Hemisphere Energy Corp | Air China vs. Charter Communications | Air China vs. LION ONE METALS |
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.
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