Correlation Between GRUPO CARSO-A1 and InPlay Oil

Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 and InPlay Oil 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-A1 and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRUPO CARSO A1 and InPlay Oil Corp, you can compare the effects of market volatilities on GRUPO CARSO-A1 and InPlay Oil 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-A1 with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and InPlay Oil.

Diversification Opportunities for GRUPO CARSO-A1 and InPlay Oil

0.12

Correlation Coefficient

GRUPO CARSO-A1  InPlay Oil

Average diversification

The 3 months correlation between GRUPO and InPlay is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and GRUPO CARSO-A1 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 A1 are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and InPlay Oil go up and down completely randomly.

Pair Corralation between GRUPO CARSO-A1 and InPlay Oil

Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 1.96 times more return on investment than InPlay Oil. However, GRUPO CARSO-A1 is 1.96 times more volatile than InPlay Oil Corp. It trades about 0.05 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.02 per unit of risk. If you would invest  306.00  in GRUPO CARSO A1 on October 24, 2024 and sell it today you would earn a total of  229.00  from holding GRUPO CARSO A1 or generate 74.84% return on investment over 90 days.

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

GRUPO CARSO A1  vs.  InPlay Oil Corp

GRUPO CARSO A1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRUPO CARSO A1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GRUPO CARSO-A1 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

InPlay Oil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InPlay Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with GRUPO CARSO-A1 and InPlay Oil

The main advantage of trading using opposite GRUPO CARSO-A1 and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.

The idea behind GRUPO CARSO A1 and InPlay Oil Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..