Correlation Between Aluar Aluminio and Grupo Financiero
Can any of the company-specific risk be diversified away by investing in both Aluar Aluminio and Grupo Financiero 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 Aluar Aluminio and Grupo Financiero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluar Aluminio Argentino and Grupo Financiero Galicia, you can compare the effects of market volatilities on Aluar Aluminio and Grupo Financiero 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 Aluar Aluminio with a short position of Grupo Financiero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluar Aluminio and Grupo Financiero.
Diversification Opportunities for Aluar Aluminio and Grupo Financiero
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aluar and Grupo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aluar Aluminio Argentino and Grupo Financiero Galicia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Galicia and Aluar Aluminio 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 Aluar Aluminio Argentino are associated (or correlated) with Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Galicia has no effect on the direction of Aluar Aluminio i.e., Aluar Aluminio and Grupo Financiero go up and down completely randomly.
Pair Corralation between Aluar Aluminio and Grupo Financiero
Assuming the 90 days trading horizon Aluar Aluminio Argentino is expected to under-perform the Grupo Financiero. But the stock apears to be less risky and, when comparing its historical volatility, Aluar Aluminio Argentino is 1.71 times less risky than Grupo Financiero. The stock trades about -0.37 of its potential returns per unit of risk. The Grupo Financiero Galicia is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 724,000 in Grupo Financiero Galicia on October 20, 2024 and sell it today you would earn a total of 60,000 from holding Grupo Financiero Galicia or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Aluar Aluminio Argentino vs. Grupo Financiero Galicia
Performance |
| Timeline |
| Aluar Aluminio Argentino |
| Grupo Financiero Galicia |
Aluar Aluminio and Grupo Financiero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluar Aluminio and Grupo Financiero
The main advantage of trading using opposite Aluar Aluminio and Grupo Financiero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluar Aluminio position performs unexpectedly, Grupo Financiero 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 Grupo Financiero will offset losses from the drop in Grupo Financiero's long position.| Aluar Aluminio vs. American Express Co | Aluar Aluminio vs. QUALCOMM Incorporated | Aluar Aluminio vs. United States Steel | Aluar Aluminio vs. Pfizer Inc |
| Grupo Financiero vs. Banco Bradesco DRC | Grupo Financiero vs. Banco Santander Brasil | Grupo Financiero vs. Banco Santander Ro | Grupo Financiero vs. Central Puerto SA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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