Correlation Between Grupo Aval and Bancolombia
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Bancolombia 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 Bancolombia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval and Bancolombia SA ADR, you can compare the effects of market volatilities on Grupo Aval and Bancolombia 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 Bancolombia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Bancolombia.
Diversification Opportunities for Grupo Aval and Bancolombia
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grupo and Bancolombia is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and Bancolombia SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancolombia SA ADR 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 Bancolombia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancolombia SA ADR has no effect on the direction of Grupo Aval i.e., Grupo Aval and Bancolombia go up and down completely randomly.
Pair Corralation between Grupo Aval and Bancolombia
Given the investment horizon of 90 days Grupo Aval is expected to generate 1.51 times less return on investment than Bancolombia. In addition to that, Grupo Aval is 1.18 times more volatile than Bancolombia SA ADR. It trades about 0.06 of its total potential returns per unit of risk. Bancolombia SA ADR is currently generating about 0.1 per unit of volatility. If you would invest 1,841 in Bancolombia SA ADR on December 5, 2024 and sell it today you would earn a total of 2,357 from holding Bancolombia SA ADR or generate 128.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval vs. Bancolombia SA ADR
Performance |
| Timeline |
| Grupo Aval |
| Bancolombia SA ADR |
Grupo Aval and Bancolombia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and Bancolombia
The main advantage of trading using opposite Grupo Aval and Bancolombia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Bancolombia 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 Bancolombia will offset losses from the drop in Bancolombia'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 |
| Bancolombia vs. Banco De Chile | ||
| Bancolombia vs. Banco Bradesco SA | ||
| Bancolombia vs. Banco Santander Chile | ||
| Bancolombia vs. Intercorp Financial Services |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |