Correlation Between Grupo Aval and Mhlbauer Holding
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Mhlbauer Holding 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 Mhlbauer Holding 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 Mhlbauer Holding AG, you can compare the effects of market volatilities on Grupo Aval and Mhlbauer Holding 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 Mhlbauer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Mhlbauer Holding.
Diversification Opportunities for Grupo Aval and Mhlbauer Holding
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and Mhlbauer is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mhlbauer Holding 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 Mhlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mhlbauer Holding has no effect on the direction of Grupo Aval i.e., Grupo Aval and Mhlbauer Holding go up and down completely randomly.
Pair Corralation between Grupo Aval and Mhlbauer Holding
Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 0.86 times more return on investment than Mhlbauer Holding. However, Grupo Aval Acciones is 1.16 times less risky than Mhlbauer Holding. It trades about 0.08 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about -0.26 per unit of risk. If you would invest 183.00 in Grupo Aval Acciones on August 28, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval Acciones vs. Mhlbauer Holding AG
Performance |
| Timeline |
| Grupo Aval Acciones |
| Mhlbauer Holding |
Grupo Aval and Mhlbauer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Mhlbauer Holding
The main advantage of trading using opposite Grupo Aval and Mhlbauer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Mhlbauer Holding 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 Mhlbauer Holding will offset losses from the drop in Mhlbauer Holding's long position.| Grupo Aval vs. Deutsche Bank Aktiengesellschaft | Grupo Aval vs. Superior Plus Corp | Grupo Aval vs. NMI Holdings | Grupo Aval vs. Origin Agritech |
| Mhlbauer Holding vs. Transport International Holdings | Mhlbauer Holding vs. INDOFOOD AGRI RES | Mhlbauer Holding vs. Performance Food Group | Mhlbauer Holding vs. TreeHouse Foods |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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