Correlation Between Grupo Aval and Wacker Neuson
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Wacker Neuson 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 Wacker Neuson 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 Wacker Neuson SE, you can compare the effects of market volatilities on Grupo Aval and Wacker Neuson 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 Wacker Neuson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Wacker Neuson.
Diversification Opportunities for Grupo Aval and Wacker Neuson
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Wacker is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Wacker Neuson SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wacker Neuson 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 Wacker Neuson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wacker Neuson SE has no effect on the direction of Grupo Aval i.e., Grupo Aval and Wacker Neuson go up and down completely randomly.
Pair Corralation between Grupo Aval and Wacker Neuson
Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 0.77 times more return on investment than Wacker Neuson. However, Grupo Aval Acciones is 1.3 times less risky than Wacker Neuson. It trades about 0.15 of its potential returns per unit of risk. Wacker Neuson SE is currently generating about 0.02 per unit of risk. If you would invest 180.00 in Grupo Aval Acciones on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Grupo Aval Acciones or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Grupo Aval Acciones vs. Wacker Neuson SE
Performance |
| Timeline |
| Grupo Aval Acciones |
| Wacker Neuson SE |
Grupo Aval and Wacker Neuson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Wacker Neuson
The main advantage of trading using opposite Grupo Aval and Wacker Neuson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Wacker Neuson 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 Wacker Neuson will offset losses from the drop in Wacker Neuson's long position.| Grupo Aval vs. JAPAN AIRLINES | Grupo Aval vs. Nok Airlines PCL | Grupo Aval vs. Mitsui Chemicals | Grupo Aval vs. AWILCO DRILLING PLC |
| Wacker Neuson vs. Apple Inc | Wacker Neuson vs. Apple Inc | Wacker Neuson vs. Apple Inc | Wacker Neuson vs. Apple Inc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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