Correlation Between GRUPO CARSO-A1 and SIEMENS HEALTH

Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 and SIEMENS HEALTH 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 SIEMENS HEALTH 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 SIEMENS HEALTH ADR050, you can compare the effects of market volatilities on GRUPO CARSO-A1 and SIEMENS HEALTH 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 SIEMENS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and SIEMENS HEALTH.

Diversification Opportunities for GRUPO CARSO-A1 and SIEMENS HEALTH

0.15

Correlation Coefficient

GRUPO CARSO-A1  SIEMENS HEALTH

Average diversification

The 3 months correlation between GRUPO and SIEMENS is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and SIEMENS HEALTH ADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS HEALTH ADR050 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 SIEMENS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS HEALTH ADR050 has no effect on the direction of GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and SIEMENS HEALTH go up and down completely randomly.

Pair Corralation between GRUPO CARSO-A1 and SIEMENS HEALTH

Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 2.92 times more return on investment than SIEMENS HEALTH. However, GRUPO CARSO-A1 is 2.92 times more volatile than SIEMENS HEALTH ADR050. It trades about 0.01 of its potential returns per unit of risk. SIEMENS HEALTH ADR050 is currently generating about 0.01 per unit of risk. If you would invest  515.00  in GRUPO CARSO A1 on October 11, 2024 and sell it today you would lose (5.00) from holding GRUPO CARSO A1 or give up 0.97% of portfolio value over 90 days.

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

GRUPO CARSO A1  vs.  SIEMENS HEALTH ADR050

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 latest uncertain 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.

SIEMENS HEALTH ADR050

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIEMENS HEALTH ADR050 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, SIEMENS HEALTH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GRUPO CARSO-A1 and SIEMENS HEALTH

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

The idea behind GRUPO CARSO A1 and SIEMENS HEALTH ADR050 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.