Correlation Between Tradeweb Markets and Grupo Carso

Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets and Grupo Carso 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 Tradeweb Markets and Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tradeweb Markets and Grupo Carso SAB, you can compare the effects of market volatilities on Tradeweb Markets and Grupo Carso 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 Tradeweb Markets with a short position of Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and Grupo Carso.

Diversification Opportunities for Tradeweb Markets and Grupo Carso

-0.08

Correlation Coefficient

Tradeweb Markets  Grupo Carso

Good diversification

The 3 months correlation between Tradeweb and Grupo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and Grupo Carso go up and down completely randomly.

Pair Corralation between Tradeweb Markets and Grupo Carso

Assuming the 90 days horizon Tradeweb Markets is expected to generate 1.16 times more return on investment than Grupo Carso. However, Tradeweb Markets is 1.16 times more volatile than Grupo Carso SAB. It trades about 0.12 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about -0.07 per unit of risk. If you would invest  12,700  in Tradeweb Markets on October 14, 2024 and sell it today you would earn a total of  400.00  from holding Tradeweb Markets or generate 3.15% return on investment over 90 days.

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

Tradeweb Markets  vs.  Grupo Carso SAB

Tradeweb Markets

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Tradeweb Markets may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Tradeweb Markets and Grupo Carso

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

The idea behind Tradeweb Markets and Grupo Carso SAB 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.