Correlation Between Grupo Carso and Discover Financial
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and Discover Financial 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 Discover Financial 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 Discover Financial Services, you can compare the effects of market volatilities on Grupo Carso and Discover Financial 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 Discover Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Discover Financial.
Diversification Opportunities for Grupo Carso and Discover Financial
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and Discover is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Discover Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discover Financial 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 Discover Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discover Financial has no effect on the direction of Grupo Carso i.e., Grupo Carso and Discover Financial go up and down completely randomly.
Pair Corralation between Grupo Carso and Discover Financial
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 0.83 times more return on investment than Discover Financial. However, Grupo Carso SAB is 1.21 times less risky than Discover Financial. It trades about -0.03 of its potential returns per unit of risk. Discover Financial Services is currently generating about -0.05 per unit of risk. If you would invest 535.00 in Grupo Carso SAB on December 11, 2024 and sell it today you would lose (20.00) from holding Grupo Carso SAB or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. Discover Financial Services
Performance |
| Timeline |
| Grupo Carso SAB |
| Discover Financial |
Grupo Carso and Discover Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Discover Financial
The main advantage of trading using opposite Grupo Carso and Discover Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, Discover Financial 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 Discover Financial will offset losses from the drop in Discover Financial's long position.| Grupo Carso vs. Honeywell International | Grupo Carso vs. Mitsubishi | Grupo Carso vs. Hitachi | Grupo Carso vs. ITOCHU |
| Discover Financial vs. Compugroup Medical SE | Discover Financial vs. MeVis Medical Solutions | Discover Financial vs. Federal Agricultural Mortgage | Discover Financial vs. SCANDMEDICAL SOLDK 040 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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