Correlation Between Grupo Carso and ITOCHU
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and ITOCHU 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 ITOCHU 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 ITOCHU, you can compare the effects of market volatilities on Grupo Carso and ITOCHU 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 ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and ITOCHU.
Diversification Opportunities for Grupo Carso and ITOCHU
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and ITOCHU is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU 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 ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of Grupo Carso i.e., Grupo Carso and ITOCHU go up and down completely randomly.
Pair Corralation between Grupo Carso and ITOCHU
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 0.85 times more return on investment than ITOCHU. However, Grupo Carso SAB is 1.18 times less risky than ITOCHU. It trades about 0.03 of its potential returns per unit of risk. ITOCHU is currently generating about -0.05 per unit of risk. If you would invest 520.00 in Grupo Carso SAB on December 28, 2024 and sell it today you would earn a total of 10.00 from holding Grupo Carso SAB or generate 1.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Carso SAB vs. ITOCHU
Performance |
Timeline |
Grupo Carso SAB |
ITOCHU |
Grupo Carso and ITOCHU Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Carso and ITOCHU
The main advantage of trading using opposite Grupo Carso and ITOCHU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, ITOCHU 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 ITOCHU will offset losses from the drop in ITOCHU's long position.Grupo Carso vs. CyberArk Software | Grupo Carso vs. Magic Software Enterprises | Grupo Carso vs. Guidewire Software | Grupo Carso vs. ATOSS SOFTWARE |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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