Correlation Between BlackRock and Grupo Carso

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

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

Diversification Opportunities for BlackRock and Grupo Carso

-0.4

Correlation Coefficient

BlackRock  Grupo Carso

Very good diversification

The 3 months correlation between BlackRock and Grupo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock 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 BlackRock 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 BlackRock 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 BlackRock i.e., BlackRock and Grupo Carso go up and down completely randomly.

Pair Corralation between BlackRock and Grupo Carso

Assuming the 90 days trading horizon BlackRock is expected to generate 0.67 times more return on investment than Grupo Carso. However, BlackRock is 1.49 times less risky than Grupo Carso. It trades about 0.0 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about -0.05 per unit of risk. If you would invest  2,111,192  in BlackRock on September 27, 2024 and sell it today you would lose (1,192) from holding BlackRock or give up 0.06% of portfolio value over 90 days.

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

BlackRock  vs.  Grupo Carso SAB

BlackRock

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, BlackRock showed solid returns over the last few months and may actually be approaching a breakup point.

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BlackRock and Grupo Carso

The main advantage of trading using opposite BlackRock and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock 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 BlackRock 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.