Correlation Between FIBRA Storage and Grupo Carso

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

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

Diversification Opportunities for FIBRA Storage and Grupo Carso

0.16

Correlation Coefficient

FIBRA Storage  Grupo Carso

Average diversification

The 3 months correlation between FIBRA and Grupo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Storage 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 FIBRA Storage 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 FIBRA Storage 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 FIBRA Storage i.e., FIBRA Storage and Grupo Carso go up and down completely randomly.

Pair Corralation between FIBRA Storage and Grupo Carso

Assuming the 90 days trading horizon FIBRA Storage is expected to generate 5.51 times less return on investment than Grupo Carso. But when comparing it to its historical volatility, FIBRA Storage is 2.18 times less risky than Grupo Carso. It trades about 0.02 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8,468  in Grupo Carso SAB on September 4, 2024 and sell it today you would earn a total of  4,310  from holding Grupo Carso SAB or generate 50.9% return on investment over 90 days.

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

FIBRA Storage  vs.  Grupo Carso SAB

FIBRA Storage

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FIBRA Storage exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with FIBRA Storage and Grupo Carso

The main advantage of trading using opposite FIBRA Storage and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIBRA Storage 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 FIBRA Storage 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.