Correlation Between Grupo Carso and BP PLC
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and BP PLC 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 BP PLC 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 BP PLC DZ1, you can compare the effects of market volatilities on Grupo Carso and BP PLC 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 BP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and BP PLC.
Diversification Opportunities for Grupo Carso and BP PLC
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grupo and BPE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and BP PLC DZ1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP PLC DZ1 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 BP PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP PLC DZ1 has no effect on the direction of Grupo Carso i.e., Grupo Carso and BP PLC go up and down completely randomly.
Pair Corralation between Grupo Carso and BP PLC
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 1.76 times more return on investment than BP PLC. However, Grupo Carso is 1.76 times more volatile than BP PLC DZ1. It trades about 0.02 of its potential returns per unit of risk. BP PLC DZ1 is currently generating about -0.02 per unit of risk. If you would invest 524.00 in Grupo Carso SAB on September 15, 2024 and sell it today you would earn a total of 16.00 from holding Grupo Carso SAB or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. BP PLC DZ1
Performance |
| Timeline |
| Grupo Carso SAB |
| BP PLC DZ1 |
Grupo Carso and BP PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and BP PLC
The main advantage of trading using opposite Grupo Carso and BP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, BP PLC 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 BP PLC will offset losses from the drop in BP PLC's long position.| Grupo Carso vs. ITOCHU | Grupo Carso vs. Marubeni | Grupo Carso vs. Sumitomo | Grupo Carso vs. Superior Plus Corp |
| BP PLC vs. Autohome ADR | BP PLC vs. Aedas Homes SA | BP PLC vs. LGI Homes | BP PLC vs. Penta Ocean Construction Co |
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..
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