Correlation Between Grupo Carso and MACOM Technology

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

Diversification Opportunities for Grupo Carso and MACOM Technology

-0.04

Correlation Coefficient

Grupo Carso  MACOM Technology

Good diversification

The 3 months correlation between Grupo and MACOM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Grupo Carso i.e., Grupo Carso and MACOM Technology go up and down completely randomly.

Pair Corralation between Grupo Carso and MACOM Technology

Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the MACOM Technology. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Carso SAB is 1.25 times less risky than MACOM Technology. The stock trades about 0.0 of its potential returns per unit of risk. The MACOM Technology Solutions is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  10,800  in MACOM Technology Solutions on October 26, 2024 and sell it today you would earn a total of  3,100  from holding MACOM Technology Solutions or generate 28.7% return on investment over 90 days.

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

Grupo Carso SAB  vs.  MACOM Technology Solutions

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MACOM Technology Sol

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MACOM Technology Solutions are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, MACOM Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and MACOM Technology

The main advantage of trading using opposite Grupo Carso and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.

The idea behind Grupo Carso SAB and MACOM Technology Solutions 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.