Correlation Between Grupo Carso and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and Volkswagen 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 Volkswagen 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 Volkswagen AG, you can compare the effects of market volatilities on Grupo Carso and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Volkswagen.
Diversification Opportunities for Grupo Carso and Volkswagen
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Volkswagen is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Grupo Carso i.e., Grupo Carso and Volkswagen go up and down completely randomly.
Pair Corralation between Grupo Carso and Volkswagen
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 1.99 times more return on investment than Volkswagen. However, Grupo Carso is 1.99 times more volatile than Volkswagen AG. It trades about -0.01 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.04 per unit of risk. If you would invest 670.00 in Grupo Carso SAB on November 3, 2024 and sell it today you would lose (125.00) from holding Grupo Carso SAB or give up 18.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. Volkswagen AG
Performance |
| Timeline |
| Grupo Carso SAB |
| Volkswagen AG |
Grupo Carso and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Volkswagen
The main advantage of trading using opposite Grupo Carso and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Grupo Carso vs. Renesas Electronics | Grupo Carso vs. Methode Electronics | Grupo Carso vs. CHINA TONTINE WINES | Grupo Carso vs. Samsung Electronics Co |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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