Correlation Between Grupo Carso and Dolby Laboratories

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

Diversification Opportunities for Grupo Carso and Dolby Laboratories

0.47

Correlation Coefficient

Grupo Carso  Dolby Laboratories

Very weak diversification

The 3 months correlation between Grupo and Dolby is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Dolby Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolby Laboratories 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 Dolby Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolby Laboratories has no effect on the direction of Grupo Carso i.e., Grupo Carso and Dolby Laboratories go up and down completely randomly.

Pair Corralation between Grupo Carso and Dolby Laboratories

Assuming the 90 days horizon Grupo Carso is expected to generate 13.55 times less return on investment than Dolby Laboratories. In addition to that, Grupo Carso is 1.21 times more volatile than Dolby Laboratories. It trades about 0.0 of its total potential returns per unit of risk. Dolby Laboratories is currently generating about 0.03 per unit of volatility. If you would invest  7,371  in Dolby Laboratories on December 19, 2024 and sell it today you would earn a total of  129.00  from holding Dolby Laboratories or generate 1.75% return on investment over 90 days.

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

Grupo Carso SAB  vs.  Dolby Laboratories

Grupo Carso SAB

Risk-Adjusted Performance

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

Dolby Laboratories

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dolby Laboratories are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Dolby Laboratories is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grupo Carso and Dolby Laboratories

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

The idea behind Grupo Carso SAB and Dolby Laboratories 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.