Correlation Between GRUPO CARSO-A1 and Siemens Aktiengesellscha

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

Diversification Opportunities for GRUPO CARSO-A1 and Siemens Aktiengesellscha

0.06

Correlation Coefficient

GRUPO CARSO-A1  Siemens Aktiengesellscha

Significant diversification

The 3 months correlation between GRUPO and Siemens is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha 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 Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and Siemens Aktiengesellscha go up and down completely randomly.

Pair Corralation between GRUPO CARSO-A1 and Siemens Aktiengesellscha

Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 2.88 times more return on investment than Siemens Aktiengesellscha. However, GRUPO CARSO-A1 is 2.88 times more volatile than Siemens Aktiengesellschaft. It trades about 0.06 of its potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.06 per unit of risk. If you would invest  237.00  in GRUPO CARSO A1 on October 11, 2024 and sell it today you would earn a total of  273.00  from holding GRUPO CARSO A1 or generate 115.19% 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.  Siemens Aktiengesellschaft

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 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.

Siemens Aktiengesellscha

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens Aktiengesellschaft are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Siemens Aktiengesellscha 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-A1 and Siemens Aktiengesellscha

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

The idea behind GRUPO CARSO A1 and Siemens Aktiengesellschaft 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.