Correlation Between GRUPO CARSO-A1 and ZhongAn Online

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Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 and ZhongAn Online 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-A1 and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPO CARSO A1 and ZhongAn Online P, you can compare the effects of market volatilities on GRUPO CARSO-A1 and ZhongAn Online 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-A1 with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and ZhongAn Online.

Diversification Opportunities for GRUPO CARSO-A1 and ZhongAn Online

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between GRUPO and ZhongAn is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and GRUPO CARSO-A1 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 A1 are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and ZhongAn Online go up and down completely randomly.

Pair Corralation between GRUPO CARSO-A1 and ZhongAn Online

Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 2.74 times more return on investment than ZhongAn Online. However, GRUPO CARSO-A1 is 2.74 times more volatile than ZhongAn Online P. It trades about 0.01 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.51 per unit of risk. If you would invest  515.00  in GRUPO CARSO A1 on October 11, 2024 and sell it today you would lose (5.00) from holding GRUPO CARSO A1 or give up 0.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

GRUPO CARSO A1  vs.  ZhongAn Online P

 Performance 
       Timeline  
GRUPO CARSO A1 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days GRUPO CARSO A1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
ZhongAn Online P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GRUPO CARSO-A1 and ZhongAn Online Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GRUPO CARSO-A1 and ZhongAn Online

The main advantage of trading using opposite GRUPO CARSO-A1 and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.
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The idea behind GRUPO CARSO A1 and ZhongAn Online P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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