Correlation Between REVO INSURANCE and Grupo Carso

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

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

Diversification Opportunities for REVO INSURANCE and Grupo Carso

-0.27

Correlation Coefficient

REVO INSURANCE  Grupo Carso

Very good diversification

The 3 months correlation between REVO and Grupo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA 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 REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and Grupo Carso go up and down completely randomly.

Pair Corralation between REVO INSURANCE and Grupo Carso

Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 1.79 times more return on investment than Grupo Carso. However, REVO INSURANCE is 1.79 times more volatile than Grupo Carso SAB. It trades about 0.04 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.03 per unit of risk. If you would invest  1,165  in REVO INSURANCE SPA on December 28, 2024 and sell it today you would earn a total of  55.00  from holding REVO INSURANCE SPA or generate 4.72% return on investment over 90 days.

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

REVO INSURANCE SPA  vs.  Grupo Carso SAB

REVO INSURANCE SPA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REVO INSURANCE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 2 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with REVO INSURANCE and Grupo Carso

The main advantage of trading using opposite REVO INSURANCE and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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 REVO INSURANCE SPA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.