Correlation Between Grupo Aval and VITA 34
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and VITA 34 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 VITA 34 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 VITA 34 AG, you can compare the effects of market volatilities on Grupo Aval and VITA 34 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 VITA 34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and VITA 34.
Diversification Opportunities for Grupo Aval and VITA 34
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and VITA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and VITA 34 AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITA 34 AG 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 VITA 34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITA 34 AG has no effect on the direction of Grupo Aval i.e., Grupo Aval and VITA 34 go up and down completely randomly.
Pair Corralation between Grupo Aval and VITA 34
Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 0.92 times more return on investment than VITA 34. However, Grupo Aval Acciones is 1.09 times less risky than VITA 34. It trades about 0.17 of its potential returns per unit of risk. VITA 34 AG is currently generating about -0.06 per unit of risk. If you would invest 181.00 in Grupo Aval Acciones on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Grupo Aval Acciones or generate 6.08% 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. VITA 34 AG
Performance |
| Timeline |
| Grupo Aval Acciones |
| VITA 34 AG |
Grupo Aval and VITA 34 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and VITA 34
The main advantage of trading using opposite Grupo Aval and VITA 34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, VITA 34 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 VITA 34 will offset losses from the drop in VITA 34's long position.| Grupo Aval vs. UNIVMUSIC GRPADR050 | Grupo Aval vs. Chesapeake Utilities | Grupo Aval vs. Align Technology | Grupo Aval vs. SCOTT TECHNOLOGY |
| VITA 34 vs. TSOGO SUN GAMING | VITA 34 vs. FUTURE GAMING GRP | VITA 34 vs. QIIWI GAMES AB | VITA 34 vs. OURGAME INTHOLDL 00005 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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