Correlation Between Marubeni and Grupo Carso

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

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

Diversification Opportunities for Marubeni and Grupo Carso

-0.19

Correlation Coefficient

Marubeni  Grupo Carso

Good diversification

The 3 months correlation between Marubeni and Grupo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni 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 Marubeni 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 Marubeni 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 Marubeni i.e., Marubeni and Grupo Carso go up and down completely randomly.

Pair Corralation between Marubeni and Grupo Carso

Assuming the 90 days trading horizon Marubeni is expected to generate 1.06 times more return on investment than Grupo Carso. However, Marubeni is 1.06 times more volatile than Grupo Carso SAB. It trades about 0.1 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  1,404  in Marubeni on December 29, 2024 and sell it today you would earn a total of  177.00  from holding Marubeni or generate 12.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Marubeni  vs.  Grupo Carso SAB

Marubeni

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marubeni are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Marubeni reported solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Marubeni and Grupo Carso

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

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.