Correlation Between Grupo Bimbo and Grupo Carso

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

Diversification Opportunities for Grupo Bimbo and Grupo Carso

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Grupo and Grupo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB and Grupo Bimbo 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 Bimbo SAB are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Grupo Carso go up and down completely randomly.

Pair Corralation between Grupo Bimbo and Grupo Carso

Assuming the 90 days trading horizon Grupo Bimbo SAB is expected to under-perform the Grupo Carso. In addition to that, Grupo Bimbo is 1.08 times more volatile than Grupo Carso SAB. It trades about -0.07 of its total potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.0 per unit of volatility. If you would invest  11,963  in Grupo Carso SAB on August 26, 2024 and sell it today you would lose (29.00) from holding Grupo Carso SAB or give up 0.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Grupo Bimbo SAB  vs.  Grupo Carso SAB

 Performance 
       Timeline  
Grupo Bimbo SAB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Bimbo SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Grupo Carso SAB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Grupo Carso is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Grupo Bimbo and Grupo Carso Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Bimbo and Grupo Carso

The main advantage of trading using opposite Grupo Bimbo and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.
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The idea behind Grupo Bimbo SAB and Grupo Carso SAB 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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