Correlation Between Grupo Aval and Gaming
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Gaming 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 Aval and Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval Acciones and Gaming and Leisure, you can compare the effects of market volatilities on Grupo Aval and Gaming 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 Aval with a short position of Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Gaming.
Diversification Opportunities for Grupo Aval and Gaming
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Gaming is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure and Grupo Aval 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 Aval Acciones are associated (or correlated) with Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Grupo Aval i.e., Grupo Aval and Gaming go up and down completely randomly.
Pair Corralation between Grupo Aval and Gaming
Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 1.94 times more return on investment than Gaming. However, Grupo Aval is 1.94 times more volatile than Gaming and Leisure. It trades about 0.02 of its potential returns per unit of risk. Gaming and Leisure is currently generating about 0.02 per unit of risk. If you would invest 188.00 in Grupo Aval Acciones on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Grupo Aval Acciones or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval Acciones vs. Gaming and Leisure
Performance |
| Timeline |
| Grupo Aval Acciones |
| Gaming and Leisure |
Grupo Aval and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Gaming
The main advantage of trading using opposite Grupo Aval and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| Grupo Aval vs. AVITA Medical | Grupo Aval vs. Iridium Communications | Grupo Aval vs. Cellnex Telecom SA | Grupo Aval vs. Chunghwa Telecom Co |
| Gaming vs. Superior Plus Corp | Gaming vs. NMI Holdings | Gaming vs. SIVERS SEMICONDUCTORS AB | Gaming vs. Talanx AG |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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