Correlation Between INTER CARS and Grupo Carso

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

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

Diversification Opportunities for INTER CARS and Grupo Carso

0.63

Correlation Coefficient

INTER CARS  Grupo Carso

Poor diversification

The 3 months correlation between INTER and Grupo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA 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 INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and Grupo Carso go up and down completely randomly.

Pair Corralation between INTER CARS and Grupo Carso

Assuming the 90 days horizon INTER CARS SA is expected to generate 1.02 times more return on investment than Grupo Carso. However, INTER CARS is 1.02 times more volatile than Grupo Carso SAB. It trades about 0.05 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.02 per unit of risk. If you would invest  11,980  in INTER CARS SA on December 29, 2024 and sell it today you would earn a total of  620.00  from holding INTER CARS SA or generate 5.18% return on investment over 90 days.

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

INTER CARS SA  vs.  Grupo Carso SAB

INTER CARS SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, INTER CARS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Grupo Carso SAB

Risk-Adjusted Performance

Weak

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

Pair Trading with INTER CARS and Grupo Carso

The main advantage of trading using opposite INTER CARS and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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 INTER CARS SA 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.