Correlation Between Grupo Carso and ENSTAR GROUP

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

Diversification Opportunities for Grupo Carso and ENSTAR GROUP

0.29

Correlation Coefficient

Grupo Carso  ENSTAR GROUP

Modest diversification

The 3 months correlation between Grupo and ENSTAR is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and ENSTAR GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENSTAR GROUP LTD 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 ENSTAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENSTAR GROUP LTD has no effect on the direction of Grupo Carso i.e., Grupo Carso and ENSTAR GROUP go up and down completely randomly.

Pair Corralation between Grupo Carso and ENSTAR GROUP

Assuming the 90 days horizon Grupo Carso SAB is expected to generate 2.54 times more return on investment than ENSTAR GROUP. However, Grupo Carso is 2.54 times more volatile than ENSTAR GROUP LTD. It trades about 0.02 of its potential returns per unit of risk. ENSTAR GROUP LTD is currently generating about 0.02 per unit of risk. If you would invest  530.00  in Grupo Carso SAB on December 20, 2024 and sell it today you would earn a total of  5.00  from holding Grupo Carso SAB or generate 0.94% return on investment over 90 days.

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

Grupo Carso SAB  vs.  ENSTAR GROUP LTD

Grupo Carso SAB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ENSTAR GROUP LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENSTAR GROUP LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ENSTAR GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grupo Carso and ENSTAR GROUP

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

The idea behind Grupo Carso SAB and ENSTAR GROUP LTD 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 CEOs Directory module to screen CEOs from public companies around the world.