Correlation Between Grupo Aval and Fresenius
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Fresenius 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 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 SE Co, you can compare the effects of market volatilities on Grupo Aval and Fresenius 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Fresenius.
Diversification Opportunities for Grupo Aval and Fresenius
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grupo and Fresenius is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of Grupo Aval i.e., Grupo Aval and Fresenius go up and down completely randomly.
Pair Corralation between Grupo Aval and Fresenius
Assuming the 90 days trading horizon Grupo Aval is expected to generate 1.1 times less return on investment than Fresenius. In addition to that, Grupo Aval is 1.76 times more volatile than Fresenius SE Co. It trades about 0.04 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about 0.07 per unit of volatility. If you would invest 3,719 in Fresenius SE Co on December 1, 2024 and sell it today you would earn a total of 92.00 from holding Fresenius SE Co or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grupo Aval Acciones vs. Fresenius SE Co
Performance |
| Timeline |
| Grupo Aval Acciones |
| Fresenius SE |
Grupo Aval and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Fresenius
The main advantage of trading using opposite Grupo Aval and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Fresenius 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 will offset losses from the drop in Fresenius' long position.| Grupo Aval vs. Tower One Wireless | Grupo Aval vs. Tencent Music Entertainment | Grupo Aval vs. Universal Entertainment | Grupo Aval vs. ZINC MEDIA GR |
| Fresenius vs. United Utilities Group | Fresenius vs. NORDHEALTH AS NK | Fresenius vs. CARDINAL HEALTH | Fresenius vs. UNITED UTILITIES GP |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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