Correlation Between Grupo Carso and TRADEDOUBLER

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

Diversification Opportunities for Grupo Carso and TRADEDOUBLER

-0.14

Correlation Coefficient

Grupo Carso  TRADEDOUBLER

Good diversification

The 3 months correlation between Grupo and TRADEDOUBLER is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK 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 TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Grupo Carso i.e., Grupo Carso and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between Grupo Carso and TRADEDOUBLER

Assuming the 90 days horizon Grupo Carso is expected to generate 21.37 times less return on investment than TRADEDOUBLER. But when comparing it to its historical volatility, Grupo Carso SAB is 2.84 times less risky than TRADEDOUBLER. It trades about 0.03 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  27.00  in TRADEDOUBLER AB SK on December 22, 2024 and sell it today you would earn a total of  21.00  from holding TRADEDOUBLER AB SK or generate 77.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Grupo Carso SAB  vs.  TRADEDOUBLER AB SK

Grupo Carso SAB

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

TRADEDOUBLER AB SK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and TRADEDOUBLER

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

The idea behind Grupo Carso SAB and TRADEDOUBLER AB SK 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.