Correlation Between X FAB and Grupo Carso
Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Grupo Carso SAB, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Grupo Carso.
Diversification Opportunities for X FAB and Grupo Carso
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XFB and Grupo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries 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 X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Grupo Carso go up and down completely randomly.
Pair Corralation between X FAB and Grupo Carso
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Grupo Carso. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.31 times less risky than Grupo Carso. The stock trades about -0.09 of its potential returns per unit of risk. The Grupo Carso SAB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 523.00 in Grupo Carso SAB on September 3, 2024 and sell it today you would earn a total of 52.00 from holding Grupo Carso SAB or generate 9.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Grupo Carso SAB
Performance |
| Timeline |
| X FAB Silicon |
| Grupo Carso SAB |
X FAB and Grupo Carso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Grupo Carso
The main advantage of trading using opposite X FAB and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.The idea behind X FAB Silicon Foundries 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.| Grupo Carso vs. Cleanaway Waste Management | Grupo Carso vs. TAL Education Group | Grupo Carso vs. Major Drilling Group | Grupo Carso vs. STRAYER EDUCATION |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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