Correlation Between Grupo Carso and Exxon

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

Diversification Opportunities for Grupo Carso and Exxon

0.38

Correlation Coefficient

Grupo Carso  Exxon

Weak diversification

The 3 months correlation between Grupo and Exxon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Exxon Mobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil has no effect on the direction of Grupo Carso i.e., Grupo Carso and Exxon go up and down completely randomly.

Pair Corralation between Grupo Carso and Exxon

Assuming the 90 days trading horizon Grupo Carso is expected to generate 2.08 times less return on investment than Exxon. In addition to that, Grupo Carso is 1.01 times more volatile than Exxon Mobil. It trades about 0.05 of its total potential returns per unit of risk. Exxon Mobil is currently generating about 0.1 per unit of volatility. If you would invest  210,627  in Exxon Mobil on December 22, 2024 and sell it today you would earn a total of  22,273  from holding Exxon Mobil or generate 10.57% return on investment over 90 days.

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

Grupo Carso SAB  vs.  Exxon Mobil

Grupo Carso SAB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 3 (%) 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.

Exxon Mobil

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Exxon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Grupo Carso and Exxon

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

The idea behind Grupo Carso SAB and Exxon Mobil 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.