Correlation Between La Franaise and GRUPO CARSO-A1

Can any of the company-specific risk be diversified away by investing in both La Franaise and GRUPO CARSO-A1 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 La Franaise and GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between La Franaise des and GRUPO CARSO A1, you can compare the effects of market volatilities on La Franaise and GRUPO CARSO-A1 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 La Franaise with a short position of GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of La Franaise and GRUPO CARSO-A1.

Diversification Opportunities for La Franaise and GRUPO CARSO-A1

0.52

Correlation Coefficient

La Franaise  GRUPO CARSO-A1

Very weak diversification

The 3 months correlation between 1WE and GRUPO is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding La Franaise des 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 La Franaise 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 La Franaise des are associated (or correlated) with GRUPO CARSO-A1. 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 La Franaise i.e., La Franaise and GRUPO CARSO-A1 go up and down completely randomly.

Pair Corralation between La Franaise and GRUPO CARSO-A1

Assuming the 90 days horizon La Franaise des is expected to under-perform the GRUPO CARSO-A1. But the stock apears to be less risky and, when comparing its historical volatility, La Franaise des is 1.02 times less risky than GRUPO CARSO-A1. The stock trades about -0.17 of its potential returns per unit of risk. The GRUPO CARSO A1 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  510.00  in GRUPO CARSO A1 on December 21, 2024 and sell it today you would earn a total of  5.00  from holding GRUPO CARSO A1 or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

La Franaise des  vs.  GRUPO CARSO A1

La Franaise des

Risk-Adjusted Performance

Very Weak

Over the last 90 days La Franaise des has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GRUPO CARSO A1

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO CARSO A1 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GRUPO CARSO-A1 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with La Franaise and GRUPO CARSO-A1

The main advantage of trading using opposite La Franaise and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if La Franaise position performs unexpectedly, GRUPO CARSO-A1 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-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.

The idea behind La Franaise des and GRUPO CARSO A1 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.