Correlation Between Grupo Carso and Natural Health

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

Diversification Opportunities for Grupo Carso and Natural Health

-0.37

Correlation Coefficient

Grupo Carso  Natural Health

Very good diversification

The 3 months correlation between Grupo and Natural is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of Grupo Carso i.e., Grupo Carso and Natural Health go up and down completely randomly.

Pair Corralation between Grupo Carso and Natural Health

Assuming the 90 days horizon Grupo Carso SAB is expected to generate 0.98 times more return on investment than Natural Health. However, Grupo Carso SAB is 1.02 times less risky than Natural Health. It trades about 0.02 of its potential returns per unit of risk. Natural Health Trends is currently generating about -0.18 per unit of risk. If you would invest  530.00  in Grupo Carso SAB on September 15, 2024 and sell it today you would earn a total of  10.00  from holding Grupo Carso SAB or generate 1.89% return on investment over 90 days.

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

Grupo Carso SAB  vs.  Natural Health Trends

Grupo Carso SAB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 1 (%) 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.

Natural Health Trends

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natural Health Trends has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Grupo Carso and Natural Health

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

The idea behind Grupo Carso SAB and Natural Health Trends 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.