Correlation Between Grupo Carso and Pfizer

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

Diversification Opportunities for Grupo Carso and Pfizer

0.01
  Correlation Coefficient

Significant diversification

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

Pair Corralation between Grupo Carso and Pfizer

Assuming the 90 days trading horizon Grupo Carso SAB is expected to generate 1.44 times more return on investment than Pfizer. However, Grupo Carso is 1.44 times more volatile than Pfizer Inc. It trades about 0.04 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.06 per unit of risk. If you would invest  8,335  in Grupo Carso SAB on September 12, 2024 and sell it today you would earn a total of  3,447  from holding Grupo Carso SAB or generate 41.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Grupo Carso SAB  vs.  Pfizer Inc

 Performance 
       Timeline  
Grupo Carso SAB 

Risk-Adjusted Performance

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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.
Pfizer Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Grupo Carso and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Carso and Pfizer

The main advantage of trading using opposite Grupo Carso and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.
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The idea behind Grupo Carso SAB and Pfizer Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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