Correlation Between Grupo Aval and Kellogg
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Kellogg 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 Kellogg 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 Kellogg Company, you can compare the effects of market volatilities on Grupo Aval and Kellogg 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 Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Kellogg.
Diversification Opportunities for Grupo Aval and Kellogg
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Kellogg is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Kellogg Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg Company 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 Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellogg Company has no effect on the direction of Grupo Aval i.e., Grupo Aval and Kellogg go up and down completely randomly.
Pair Corralation between Grupo Aval and Kellogg
Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 3.51 times more return on investment than Kellogg. However, Grupo Aval is 3.51 times more volatile than Kellogg Company. It trades about 0.28 of its potential returns per unit of risk. Kellogg Company is currently generating about 0.11 per unit of risk. If you would invest 196.00 in Grupo Aval Acciones on November 27, 2024 and sell it today you would earn a total of 94.00 from holding Grupo Aval Acciones or generate 47.96% 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. Kellogg Company
Performance |
| Timeline |
| Grupo Aval Acciones |
| Kellogg Company |
Grupo Aval and Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Kellogg
The main advantage of trading using opposite Grupo Aval and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Kellogg 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 Kellogg will offset losses from the drop in Kellogg's long position.| Grupo Aval vs. Agricultural Bank of | Grupo Aval vs. United Airlines Holdings | Grupo Aval vs. Singapore Airlines Limited | Grupo Aval vs. Dairy Farm International |
| Kellogg vs. Norwegian Air Shuttle | Kellogg vs. Enter Air SA | Kellogg vs. Daito Trust Construction | Kellogg vs. Delta Air Lines |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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