Correlation Between Grupo Aval and Bayer AG
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By analyzing existing cross correlation between Grupo Aval Acciones and Bayer AG NA, you can compare the effects of market volatilities on Grupo Aval and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Bayer AG.
Diversification Opportunities for Grupo Aval and Bayer AG
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and Bayer is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Bayer AG NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG NA 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG NA has no effect on the direction of Grupo Aval i.e., Grupo Aval and Bayer AG go up and down completely randomly.
Pair Corralation between Grupo Aval and Bayer AG
Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 0.44 times more return on investment than Bayer AG. However, Grupo Aval Acciones is 2.3 times less risky than Bayer AG. It trades about 0.25 of its potential returns per unit of risk. Bayer AG NA is currently generating about -0.35 per unit of risk. If you would invest 183.00 in Grupo Aval Acciones on August 30, 2024 and sell it today you would earn a total of 15.00 from holding Grupo Aval Acciones or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grupo Aval Acciones vs. Bayer AG NA
Performance |
| Timeline |
| Grupo Aval Acciones |
| Bayer AG NA |
Grupo Aval and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Bayer AG
The main advantage of trading using opposite Grupo Aval and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| Grupo Aval vs. ETFS Coffee ETC | Grupo Aval vs. FANDIFI TECHNOLOGY P | Grupo Aval vs. MACOM Technology Solutions | Grupo Aval vs. Computer And Technologies |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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