Correlation Between Grupo Carso and Boeing

Can any of the company-specific risk be diversified away by investing in both Grupo Carso and Boeing 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 Boeing 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 The Boeing, you can compare the effects of market volatilities on Grupo Carso and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Boeing.

Diversification Opportunities for Grupo Carso and Boeing

-0.57

Correlation Coefficient

Grupo Carso  Boeing

Excellent diversification

The 3 months correlation between Grupo and Boeing is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing 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 Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Grupo Carso i.e., Grupo Carso and Boeing go up and down completely randomly.

Pair Corralation between Grupo Carso and Boeing

Assuming the 90 days trading horizon Grupo Carso SAB is expected to generate 1.13 times more return on investment than Boeing. However, Grupo Carso is 1.13 times more volatile than The Boeing. It trades about 0.03 of its potential returns per unit of risk. The Boeing is currently generating about 0.0 per unit of risk. If you would invest  9,110  in Grupo Carso SAB on October 5, 2024 and sell it today you would earn a total of  2,412  from holding Grupo Carso SAB or generate 26.48% return on investment over 90 days.

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

Grupo Carso SAB  vs.  The Boeing

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 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.

Boeing

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Boeing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and Boeing

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

The idea behind Grupo Carso SAB and The Boeing 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.