Correlation Between Grupo Carso and United Airlines
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and United Airlines 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 United Airlines 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 United Airlines Holdings, you can compare the effects of market volatilities on Grupo Carso and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and United Airlines.
Diversification Opportunities for Grupo Carso and United Airlines
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grupo and United is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Grupo Carso i.e., Grupo Carso and United Airlines go up and down completely randomly.
Pair Corralation between Grupo Carso and United Airlines
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 0.62 times more return on investment than United Airlines. However, Grupo Carso SAB is 1.61 times less risky than United Airlines. It trades about -0.01 of its potential returns per unit of risk. United Airlines Holdings is currently generating about -0.04 per unit of risk. If you would invest 535.00 in Grupo Carso SAB on December 12, 2024 and sell it today you would lose (15.00) from holding Grupo Carso SAB or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. United Airlines Holdings
Performance |
| Timeline |
| Grupo Carso SAB |
| United Airlines Holdings |
Grupo Carso and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and United Airlines
The main advantage of trading using opposite Grupo Carso and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| Grupo Carso vs. Honeywell International | ||
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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