Correlation Between Grupo Carso and Advanced Micro

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

By analyzing existing cross correlation between Grupo Carso SAB and Advanced Micro Devices, you can compare the effects of market volatilities on Grupo Carso and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Advanced Micro.

Diversification Opportunities for Grupo Carso and Advanced Micro

0.64

Correlation Coefficient

Grupo Carso  Advanced Micro

Poor diversification

The 3 months correlation between Grupo and Advanced is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 SAB are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Grupo Carso i.e., Grupo Carso and Advanced Micro go up and down completely randomly.

Pair Corralation between Grupo Carso and Advanced Micro

Assuming the 90 days trading horizon Grupo Carso SAB is expected to generate 0.72 times more return on investment than Advanced Micro. However, Grupo Carso SAB is 1.39 times less risky than Advanced Micro. It trades about 0.03 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.01 per unit of risk. If you would invest  11,798  in Grupo Carso SAB on September 2, 2024 and sell it today you would earn a total of  374.00  from holding Grupo Carso SAB or generate 3.17% return on investment over 90 days.

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

Grupo Carso SAB  vs.  Advanced Micro Devices

Grupo Carso SAB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Grupo Carso is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Advanced Micro Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Micro Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Advanced Micro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Carso and Advanced Micro

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

The idea behind Grupo Carso SAB and Advanced Micro Devices 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.