Correlation Between United States and Grupo Concesionario

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

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

Diversification Opportunities for United States and Grupo Concesionario

-0.88

Correlation Coefficient

United States  Grupo Concesionario

Pay attention - limited upside

The 3 months correlation between United and Grupo is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del and United States 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 United States Steel are associated (or correlated) with Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of United States i.e., United States and Grupo Concesionario go up and down completely randomly.

Pair Corralation between United States and Grupo Concesionario

Given the investment horizon of 90 days United States Steel is expected to generate 1.45 times more return on investment than Grupo Concesionario. However, United States is 1.45 times more volatile than Grupo Concesionario del. It trades about 0.25 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.26 per unit of risk. If you would invest  1,237,500  in United States Steel on December 28, 2024 and sell it today you would earn a total of  615,000  from holding United States Steel or generate 49.7% return on investment over 90 days.

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

United States Steel  vs.  Grupo Concesionario del

United States Steel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United States Steel are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, United States sustained solid returns over the last few months and may actually be approaching a breakup point.

Grupo Concesionario del

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Concesionario del has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with United States and Grupo Concesionario

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

The idea behind United States Steel and Grupo Concesionario del 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.