Correlation Between GRUPO CARSO-A1 and BC IRON

Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 and BC IRON 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-A1 and BC IRON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRUPO CARSO A1 and BC IRON, you can compare the effects of market volatilities on GRUPO CARSO-A1 and BC IRON 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-A1 with a short position of BC IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and BC IRON.

Diversification Opportunities for GRUPO CARSO-A1 and BC IRON

0.41

Correlation Coefficient

GRUPO CARSO-A1  BC IRON

Very weak diversification

The 3 months correlation between GRUPO and BC3 is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and BC IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC IRON and GRUPO CARSO-A1 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 A1 are associated (or correlated) with BC IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC IRON has no effect on the direction of GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and BC IRON go up and down completely randomly.

Pair Corralation between GRUPO CARSO-A1 and BC IRON

Assuming the 90 days trading horizon GRUPO CARSO-A1 is expected to generate 1.4 times less return on investment than BC IRON. In addition to that, GRUPO CARSO-A1 is 1.04 times more volatile than BC IRON. It trades about 0.13 of its total potential returns per unit of risk. BC IRON is currently generating about 0.19 per unit of volatility. If you would invest  14.00  in BC IRON on April 20, 2025 and sell it today you would earn a total of  5.00  from holding BC IRON or generate 35.71% return on investment over 90 days.

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

GRUPO CARSO A1  vs.  BC IRON

GRUPO CARSO A1

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO CARSO A1 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GRUPO CARSO-A1 unveiled solid returns over the last few months and may actually be approaching a breakup point.

BC IRON

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BC IRON are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BC IRON unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRUPO CARSO-A1 and BC IRON

The main advantage of trading using opposite GRUPO CARSO-A1 and BC IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 position performs unexpectedly, BC IRON 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 BC IRON will offset losses from the drop in BC IRON's long position.

The idea behind GRUPO CARSO A1 and BC IRON 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.