Correlation Between Grupo Carso and China Water
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and China Water 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 China Water 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 China Water Affairs, you can compare the effects of market volatilities on Grupo Carso and China Water 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 China Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and China Water.
Diversification Opportunities for Grupo Carso and China Water
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and China Water Affairs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Water Affairs 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 China Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Water Affairs has no effect on the direction of Grupo Carso i.e., Grupo Carso and China Water go up and down completely randomly.
Pair Corralation between Grupo Carso and China Water
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 0.82 times more return on investment than China Water. However, Grupo Carso SAB is 1.22 times less risky than China Water. It trades about 0.08 of its potential returns per unit of risk. China Water Affairs is currently generating about 0.06 per unit of risk. If you would invest 186.00 in Grupo Carso SAB on September 5, 2024 and sell it today you would earn a total of 364.00 from holding Grupo Carso SAB or generate 195.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Grupo Carso SAB vs. China Water Affairs
Performance |
| Timeline |
| Grupo Carso SAB |
| China Water Affairs |
Grupo Carso and China Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and China Water
The main advantage of trading using opposite Grupo Carso and China Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, China Water 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 China Water will offset losses from the drop in China Water's long position.| Grupo Carso vs. Chunghwa Telecom Co | Grupo Carso vs. Singapore Telecommunications Limited | Grupo Carso vs. MCEWEN MINING INC | Grupo Carso vs. Perseus Mining Limited |
| China Water vs. Grupo Carso SAB | China Water vs. AM EAGLE OUTFITTERS | China Water vs. G III Apparel Group | China Water vs. Mitsui Chemicals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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