Correlation Between Grupo Carso and ARISTOCRAT LEISURE

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

Diversification Opportunities for Grupo Carso and ARISTOCRAT LEISURE

-0.27

Correlation Coefficient

Grupo Carso  ARISTOCRAT LEISURE

Very good diversification

The 3 months correlation between Grupo and ARISTOCRAT is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and ARISTOCRAT LEISURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARISTOCRAT LEISURE has no effect on the direction of Grupo Carso i.e., Grupo Carso and ARISTOCRAT LEISURE go up and down completely randomly.

Pair Corralation between Grupo Carso and ARISTOCRAT LEISURE

Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the ARISTOCRAT LEISURE. In addition to that, Grupo Carso is 1.48 times more volatile than ARISTOCRAT LEISURE. It trades about -0.17 of its total potential returns per unit of risk. ARISTOCRAT LEISURE is currently generating about 0.2 per unit of volatility. If you would invest  4,160  in ARISTOCRAT LEISURE on October 9, 2024 and sell it today you would earn a total of  140.00  from holding ARISTOCRAT LEISURE or generate 3.37% 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.  ARISTOCRAT LEISURE

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ARISTOCRAT LEISURE

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ARISTOCRAT LEISURE are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ARISTOCRAT LEISURE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and ARISTOCRAT LEISURE

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

The idea behind Grupo Carso SAB and ARISTOCRAT LEISURE 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.