Correlation Between Grupo Carso and MARKET VECTR

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

Diversification Opportunities for Grupo Carso and MARKET VECTR

0.65

Correlation Coefficient

Grupo Carso  MARKET VECTR

Poor diversification

The 3 months correlation between Grupo and MARKET is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of Grupo Carso i.e., Grupo Carso and MARKET VECTR go up and down completely randomly.

Pair Corralation between Grupo Carso and MARKET VECTR

Assuming the 90 days horizon Grupo Carso SAB is expected to generate 2.29 times more return on investment than MARKET VECTR. However, Grupo Carso is 2.29 times more volatile than MARKET VECTR RETAIL. It trades about 0.01 of its potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about -0.11 per unit of risk. If you would invest  515.00  in Grupo Carso SAB on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Grupo Carso SAB or generate 0.0% return on investment over 90 days.

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

Grupo Carso SAB  vs.  MARKET VECTR RETAIL

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

MARKET VECTR RETAIL

Risk-Adjusted Performance

Very Weak

Over the last 90 days MARKET VECTR RETAIL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, MARKET VECTR is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Grupo Carso and MARKET VECTR

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

The idea behind Grupo Carso SAB and MARKET VECTR RETAIL 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.