Correlation Between Grupo Carso and Haier Smart

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

Diversification Opportunities for Grupo Carso and Haier Smart

0.0

Correlation Coefficient

Grupo Carso  Haier Smart

Pay attention - limited upside

The 3 months correlation between Grupo and Haier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of Grupo Carso i.e., Grupo Carso and Haier Smart go up and down completely randomly.

Pair Corralation between Grupo Carso and Haier Smart

Assuming the 90 days horizon Grupo Carso is expected to generate 1.26 times less return on investment than Haier Smart. In addition to that, Grupo Carso is 1.4 times more volatile than Haier Smart Home. It trades about 0.03 of its total potential returns per unit of risk. Haier Smart Home is currently generating about 0.05 per unit of volatility. If you would invest  180.00  in Haier Smart Home on December 23, 2024 and sell it today you would earn a total of  6.00  from holding Haier Smart Home or generate 3.33% return on investment over 90 days.

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

Grupo Carso SAB  vs.  Haier Smart Home

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 2 (%) 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Haier Smart Home

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Haier Smart Home are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Haier Smart is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Grupo Carso and Haier Smart

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

The idea behind Grupo Carso SAB and Haier Smart Home 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.