Correlation Between Grupo Aval and Logista
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Logista 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 Logista 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 Logista, you can compare the effects of market volatilities on Grupo Aval and Logista 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 Logista. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Logista.
Diversification Opportunities for Grupo Aval and Logista
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Logista is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Logista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logista 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 Logista. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logista has no effect on the direction of Grupo Aval i.e., Grupo Aval and Logista go up and down completely randomly.
Pair Corralation between Grupo Aval and Logista
Assuming the 90 days trading horizon Grupo Aval is expected to generate 1.01 times less return on investment than Logista. In addition to that, Grupo Aval is 1.82 times more volatile than Logista. It trades about 0.22 of its total potential returns per unit of risk. Logista is currently generating about 0.41 per unit of volatility. If you would invest 2,782 in Logista on September 1, 2024 and sell it today you would earn a total of 218.00 from holding Logista or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grupo Aval Acciones vs. Logista
Performance |
| Timeline |
| Grupo Aval Acciones |
| Logista |
Grupo Aval and Logista Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Logista
The main advantage of trading using opposite Grupo Aval and Logista positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Logista 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 Logista will offset losses from the drop in Logista's long position.| Grupo Aval vs. Nucletron Electronic Aktiengesellschaft | Grupo Aval vs. UET United Electronic | Grupo Aval vs. Arrow Electronics | Grupo Aval vs. Renesas Electronics |
| Logista vs. Addus HomeCare | Logista vs. HomeToGo SE | Logista vs. PennantPark Investment | Logista vs. Haier Smart Home |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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