Correlation Between Grupo Carso and REVO INSURANCE

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

Diversification Opportunities for Grupo Carso and REVO INSURANCE

-0.05

Correlation Coefficient

Grupo Carso  REVO INSURANCE

Good diversification

The 3 months correlation between Grupo and REVO is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA 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 REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of Grupo Carso i.e., Grupo Carso and REVO INSURANCE go up and down completely randomly.

Pair Corralation between Grupo Carso and REVO INSURANCE

Assuming the 90 days horizon Grupo Carso is expected to generate 1.38 times less return on investment than REVO INSURANCE. In addition to that, Grupo Carso is 2.95 times more volatile than REVO INSURANCE SPA. It trades about 0.04 of its total potential returns per unit of risk. REVO INSURANCE SPA is currently generating about 0.15 per unit of volatility. If you would invest  854.00  in REVO INSURANCE SPA on September 3, 2024 and sell it today you would earn a total of  226.00  from holding REVO INSURANCE SPA or generate 26.46% 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.  REVO INSURANCE SPA

Grupo Carso SAB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Grupo Carso may actually be approaching a critical reversion point that can send shares even higher in January 2025.

REVO INSURANCE SPA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and REVO INSURANCE

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

The idea behind Grupo Carso SAB and REVO INSURANCE SPA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.