Correlation Between Grupo Carso and BlackRock

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

Diversification Opportunities for Grupo Carso and BlackRock

-0.4

Correlation Coefficient

Grupo Carso  BlackRock

Very good diversification

The 3 months correlation between Grupo and BlackRock is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock 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 BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Grupo Carso i.e., Grupo Carso and BlackRock go up and down completely randomly.

Pair Corralation between Grupo Carso and BlackRock

Assuming the 90 days trading horizon Grupo Carso SAB is expected to under-perform the BlackRock. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Carso SAB is 1.0 times less risky than BlackRock. The stock trades about -0.06 of its potential returns per unit of risk. The BlackRock is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,665,143  in BlackRock on September 27, 2024 and sell it today you would earn a total of  444,857  from holding BlackRock or generate 26.72% return on investment over 90 days.

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

Grupo Carso SAB  vs.  BlackRock

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.

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.

Pair Trading with Grupo Carso and BlackRock

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

The idea behind Grupo Carso SAB and BlackRock 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.