Correlation Between GMO Internet and GRUPO CARSO
Can any of the company-specific risk be diversified away by investing in both GMO Internet 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 GMO Internet and GRUPO CARSO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMO Internet and GRUPO CARSO A1, you can compare the effects of market volatilities on GMO Internet 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 GMO Internet with a short position of GRUPO CARSO. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMO Internet and GRUPO CARSO.
Diversification Opportunities for GMO Internet and GRUPO CARSO
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GMO and GRUPO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding GMO Internet and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 and GMO Internet 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 GMO Internet 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 A1 has no effect on the direction of GMO Internet i.e., GMO Internet and GRUPO CARSO go up and down completely randomly.
Pair Corralation between GMO Internet and GRUPO CARSO
Assuming the 90 days horizon GMO Internet is expected to generate 0.43 times more return on investment than GRUPO CARSO. However, GMO Internet is 2.31 times less risky than GRUPO CARSO. It trades about 0.0 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about -0.02 per unit of risk. If you would invest 1,620 in GMO Internet on October 30, 2024 and sell it today you would lose (10.00) from holding GMO Internet or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMO Internet vs. GRUPO CARSO A1
Performance |
| Timeline |
| GMO Internet |
| GRUPO CARSO A1 |
GMO Internet and GRUPO CARSO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMO Internet and GRUPO CARSO
The main advantage of trading using opposite GMO Internet and GRUPO CARSO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMO Internet 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.| GMO Internet vs. Genertec Universal Medical | GMO Internet vs. Casio Computer CoLtd | GMO Internet vs. SCOTT TECHNOLOGY | GMO Internet vs. X FAB Silicon Foundries |
| GRUPO CARSO vs. COLUMBIA SPORTSWEAR | GRUPO CARSO vs. Yuexiu Transport Infrastructure | GRUPO CARSO vs. KINGBOARD CHEMICAL | GRUPO CARSO vs. TIANDE CHEMICAL |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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