Correlation Between Grupo Aval and Akebia Ther
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Akebia Ther 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 Akebia Ther into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval and Akebia Ther, you can compare the effects of market volatilities on Grupo Aval and Akebia Ther 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 Akebia Ther. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Akebia Ther.
Diversification Opportunities for Grupo Aval and Akebia Ther
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Akebia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and Akebia Ther in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akebia Ther 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 are associated (or correlated) with Akebia Ther. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akebia Ther has no effect on the direction of Grupo Aval i.e., Grupo Aval and Akebia Ther go up and down completely randomly.
Pair Corralation between Grupo Aval and Akebia Ther
Given the investment horizon of 90 days Grupo Aval is expected to generate 0.75 times more return on investment than Akebia Ther. However, Grupo Aval is 1.34 times less risky than Akebia Ther. It trades about 0.39 of its potential returns per unit of risk. Akebia Ther is currently generating about 0.24 per unit of risk. If you would invest 214.00 in Grupo Aval on November 9, 2024 and sell it today you would earn a total of 58.00 from holding Grupo Aval or generate 27.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval vs. Akebia Ther
Performance |
| Timeline |
| Grupo Aval |
| Akebia Ther |
Grupo Aval and Akebia Ther Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Akebia Ther
The main advantage of trading using opposite Grupo Aval and Akebia Ther positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Akebia Ther 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 Akebia Ther will offset losses from the drop in Akebia Ther's long position.| Grupo Aval vs. Banco De Chile | Grupo Aval vs. Banco Santander Chile | Grupo Aval vs. Credicorp | Grupo Aval vs. Foreign Trade Bank |
| Akebia Ther vs. Protalix Biotherapeutics | Akebia Ther vs. Cidara Therapeutics | Akebia Ther vs. X4 Pharmaceuticals | Akebia Ther vs. Seres Therapeutics |
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 Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |