Correlation Between Grupo Carso and Aurubis AG

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

Diversification Opportunities for Grupo Carso and Aurubis AG

-0.27

Correlation Coefficient

Grupo Carso  Aurubis AG

Very good diversification

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

Pair Corralation between Grupo Carso and Aurubis AG

Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the Aurubis AG. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Carso SAB is 1.11 times less risky than Aurubis AG. The stock trades about -0.14 of its potential returns per unit of risk. The Aurubis AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  7,515  in Aurubis AG on September 29, 2024 and sell it today you would earn a total of  155.00  from holding Aurubis AG or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Grupo Carso SAB  vs.  Aurubis AG

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

Aurubis AG

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurubis AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Aurubis AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and Aurubis AG

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

The idea behind Grupo Carso SAB and Aurubis AG 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.