Correlation Between Grupo Aval and Bayfirst Financial
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Bayfirst Financial 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 Bayfirst Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval and Bayfirst Financial Corp, you can compare the effects of market volatilities on Grupo Aval and Bayfirst Financial 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 Bayfirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Bayfirst Financial.
Diversification Opportunities for Grupo Aval and Bayfirst Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and Bayfirst is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and Bayfirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayfirst Financial Corp 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 Bayfirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayfirst Financial Corp has no effect on the direction of Grupo Aval i.e., Grupo Aval and Bayfirst Financial go up and down completely randomly.
Pair Corralation between Grupo Aval and Bayfirst Financial
Given the investment horizon of 90 days Grupo Aval is expected to generate 0.67 times more return on investment than Bayfirst Financial. However, Grupo Aval is 1.5 times less risky than Bayfirst Financial. It trades about 0.15 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about 0.08 per unit of risk. If you would invest 197.00 in Grupo Aval on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Grupo Aval or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval vs. Bayfirst Financial Corp
Performance |
| Timeline |
| Grupo Aval |
| Bayfirst Financial Corp |
Grupo Aval and Bayfirst Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Bayfirst Financial
The main advantage of trading using opposite Grupo Aval and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Bayfirst Financial 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 Bayfirst Financial will offset losses from the drop in Bayfirst Financial'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 |
| Bayfirst Financial vs. Home Federal Bancorp | Bayfirst Financial vs. LINKBANCORP | Bayfirst Financial vs. Affinity Bancshares | Bayfirst Financial vs. BayCom Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |