Correlation Between Grupo Carso and Grupo Financiero

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Can any of the company-specific risk be diversified away by investing in both Grupo Carso and Grupo Financiero 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 Grupo Financiero 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 Grupo Financiero Inbursa, you can compare the effects of market volatilities on Grupo Carso and Grupo Financiero 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 Grupo Financiero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Grupo Financiero.

Diversification Opportunities for Grupo Carso and Grupo Financiero

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Grupo and Grupo is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Grupo Financiero Inbursa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Inbursa 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 Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Inbursa has no effect on the direction of Grupo Carso i.e., Grupo Carso and Grupo Financiero go up and down completely randomly.

Pair Corralation between Grupo Carso and Grupo Financiero

Assuming the 90 days trading horizon Grupo Carso is expected to generate 1.92 times less return on investment than Grupo Financiero. In addition to that, Grupo Carso is 1.08 times more volatile than Grupo Financiero Inbursa. It trades about 0.01 of its total potential returns per unit of risk. Grupo Financiero Inbursa is currently generating about 0.02 per unit of volatility. If you would invest  5,089  in Grupo Financiero Inbursa on January 26, 2025 and sell it today you would earn a total of  320.00  from holding Grupo Financiero Inbursa or generate 6.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Grupo Carso SAB  vs.  Grupo Financiero Inbursa

 Performance 
       Timeline  
Grupo Carso SAB 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Carso sustained solid returns over the last few months and may actually be approaching a breakup point.
Grupo Financiero Inbursa 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Financiero Inbursa are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Grupo Financiero reported solid returns over the last few months and may actually be approaching a breakup point.

Grupo Carso and Grupo Financiero Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Carso and Grupo Financiero

The main advantage of trading using opposite Grupo Carso and Grupo Financiero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, Grupo Financiero 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 Financiero will offset losses from the drop in Grupo Financiero's long position.
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The idea behind Grupo Carso SAB and Grupo Financiero Inbursa 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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