Correlation Between Grupo Carso and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and TRAINLINE PLC 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 TRAINLINE PLC 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 TRAINLINE PLC LS, you can compare the effects of market volatilities on Grupo Carso and TRAINLINE PLC 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 TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and TRAINLINE PLC.
Diversification Opportunities for Grupo Carso and TRAINLINE PLC
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and TRAINLINE is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS 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 TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of Grupo Carso i.e., Grupo Carso and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between Grupo Carso and TRAINLINE PLC
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 0.53 times more return on investment than TRAINLINE PLC. However, Grupo Carso SAB is 1.9 times less risky than TRAINLINE PLC. It trades about 0.03 of its potential returns per unit of risk. TRAINLINE PLC LS is currently generating about -0.15 per unit of risk. If you would invest 520.00 in Grupo Carso SAB on December 30, 2024 and sell it today you would earn a total of 15.00 from holding Grupo Carso SAB or generate 2.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Carso SAB vs. TRAINLINE PLC LS
Performance |
Timeline |
Grupo Carso SAB |
TRAINLINE PLC LS |
Grupo Carso and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Carso and TRAINLINE PLC
The main advantage of trading using opposite Grupo Carso and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.Grupo Carso vs. Hitachi Construction Machinery | Grupo Carso vs. ALEFARM BREWING DK 05 | Grupo Carso vs. Yunnan Water Investment | Grupo Carso vs. Sumitomo Mitsui Construction |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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