Correlation Between Grupo Carso and Airbus SE

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

Diversification Opportunities for Grupo Carso and Airbus SE

-0.24

Correlation Coefficient

Grupo Carso  Airbus SE

Very good diversification

The 3 months correlation between Grupo and Airbus is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Grupo Carso i.e., Grupo Carso and Airbus SE go up and down completely randomly.

Pair Corralation between Grupo Carso and Airbus SE

Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the Airbus SE. In addition to that, Grupo Carso is 1.52 times more volatile than Airbus SE. It trades about -0.04 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.27 per unit of volatility. If you would invest  12,636  in Airbus SE on October 8, 2024 and sell it today you would earn a total of  3,218  from holding Airbus SE or generate 25.47% 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.  Airbus SE

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.

Airbus SE

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Airbus SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and Airbus SE

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

The idea behind Grupo Carso SAB and Airbus SE 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.