Correlation Between GRUPO CARSO and Nasdaq

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

Diversification Opportunities for GRUPO CARSO and Nasdaq

0.44

Correlation Coefficient

GRUPO CARSO  Nasdaq

Very weak diversification

The 3 months correlation between GRUPO and Nasdaq is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc 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 A1 are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of GRUPO CARSO i.e., GRUPO CARSO and Nasdaq go up and down completely randomly.

Pair Corralation between GRUPO CARSO and Nasdaq

Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 1.06 times more return on investment than Nasdaq. However, GRUPO CARSO is 1.06 times more volatile than Nasdaq Inc. It trades about 0.06 of its potential returns per unit of risk. Nasdaq Inc is currently generating about -0.07 per unit of risk. If you would invest  540.00  in GRUPO CARSO A1 on December 5, 2024 and sell it today you would earn a total of  10.00  from holding GRUPO CARSO A1 or generate 1.85% return on investment over 90 days.

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

GRUPO CARSO A1  vs.  Nasdaq Inc

GRUPO CARSO A1

Risk-Adjusted Performance

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 is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Nasdaq Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Nasdaq is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GRUPO CARSO and Nasdaq

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

The idea behind GRUPO CARSO A1 and Nasdaq Inc 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.