Correlation Between Grupo Carso and Cars
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and Cars 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 Cars 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 Cars Inc, you can compare the effects of market volatilities on Grupo Carso and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Cars.
Diversification Opportunities for Grupo Carso and Cars
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Cars is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Grupo Carso i.e., Grupo Carso and Cars go up and down completely randomly.
Pair Corralation between Grupo Carso and Cars
Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the Cars. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Carso SAB is 1.28 times less risky than Cars. The stock trades about -0.06 of its potential returns per unit of risk. The Cars Inc is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,420 in Cars Inc on August 25, 2024 and sell it today you would earn a total of 320.00 from holding Cars Inc or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. Cars Inc
Performance |
| Timeline |
| Grupo Carso SAB |
| Cars Inc |
Grupo Carso and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Cars
The main advantage of trading using opposite Grupo Carso and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Grupo Carso vs. Superior Plus Corp | Grupo Carso vs. NMI Holdings | Grupo Carso vs. Origin Agritech | Grupo Carso vs. SIVERS SEMICONDUCTORS AB |
| Cars vs. Superior Plus Corp | Cars vs. NMI Holdings | Cars vs. Origin Agritech | Cars vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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