Correlation Between Grupo Aval and FRESENIUS SE+CO
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and FRESENIUS SE+CO 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 FRESENIUS SE+CO 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 FRESENIUS SECO ADR, you can compare the effects of market volatilities on Grupo Aval and FRESENIUS SE+CO 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 FRESENIUS SE+CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and FRESENIUS SE+CO.
Diversification Opportunities for Grupo Aval and FRESENIUS SE+CO
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grupo and FRESENIUS is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and FRESENIUS SECO ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRESENIUS SECO ADR 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 FRESENIUS SE+CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRESENIUS SECO ADR has no effect on the direction of Grupo Aval i.e., Grupo Aval and FRESENIUS SE+CO go up and down completely randomly.
Pair Corralation between Grupo Aval and FRESENIUS SE+CO
Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 1.42 times more return on investment than FRESENIUS SE+CO. However, Grupo Aval is 1.42 times more volatile than FRESENIUS SECO ADR. It trades about 0.34 of its potential returns per unit of risk. FRESENIUS SECO ADR is currently generating about 0.19 per unit of risk. If you would invest 192.00 in Grupo Aval Acciones on December 1, 2024 and sell it today you would earn a total of 95.00 from holding Grupo Aval Acciones or generate 49.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval Acciones vs. FRESENIUS SECO ADR
Performance |
| Timeline |
| Grupo Aval Acciones |
| FRESENIUS SECO ADR |
Grupo Aval and FRESENIUS SE+CO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and FRESENIUS SE+CO
The main advantage of trading using opposite Grupo Aval and FRESENIUS SE+CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, FRESENIUS SE+CO 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 FRESENIUS SE+CO will offset losses from the drop in FRESENIUS SE+CO's long position.| Grupo Aval vs. BJs Restaurants | Grupo Aval vs. East Africa Metals | Grupo Aval vs. KENEDIX OFFICE INV | Grupo Aval vs. OFFICE DEPOT |
| FRESENIUS SE+CO vs. UNITED INTERNET N | FRESENIUS SE+CO vs. BANKINTER ADR 2007 | FRESENIUS SE+CO vs. Takark Jelzlogbank Nyrt | FRESENIUS SE+CO vs. JSC Halyk bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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