Correlation Between Grupo Carso and GMxico Transportes

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

Diversification Opportunities for Grupo Carso and GMxico Transportes

0.0

Correlation Coefficient

Grupo Carso  GMxico Transportes

Pay attention - limited upside

The 3 months correlation between Grupo and GMxico is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and GMxico Transportes SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMxico Transportes SAB 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 GMxico Transportes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMxico Transportes SAB has no effect on the direction of Grupo Carso i.e., Grupo Carso and GMxico Transportes go up and down completely randomly.

Pair Corralation between Grupo Carso and GMxico Transportes

Assuming the 90 days trading horizon Grupo Carso SAB is expected to generate 0.96 times more return on investment than GMxico Transportes. However, Grupo Carso SAB is 1.04 times less risky than GMxico Transportes. It trades about 0.08 of its potential returns per unit of risk. GMxico Transportes SAB is currently generating about 0.01 per unit of risk. If you would invest  11,757  in Grupo Carso SAB on September 4, 2024 and sell it today you would earn a total of  1,021  from holding Grupo Carso SAB or generate 8.68% return on investment over 90 days.

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

Grupo Carso SAB  vs.  GMxico Transportes SAB

Grupo Carso SAB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Carso may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GMxico Transportes SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GMxico Transportes SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, GMxico Transportes is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Carso and GMxico Transportes

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

The idea behind Grupo Carso SAB and GMxico Transportes 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.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.