Correlation Between Grupo Aval and HV Bancorp
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and HV Bancorp 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 HV Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval and HV Bancorp, you can compare the effects of market volatilities on Grupo Aval and HV Bancorp 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 HV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and HV Bancorp.
Diversification Opportunities for Grupo Aval and HV Bancorp
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and HVBC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and HV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HV Bancorp 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 HV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HV Bancorp has no effect on the direction of Grupo Aval i.e., Grupo Aval and HV Bancorp go up and down completely randomly.
Pair Corralation between Grupo Aval and HV Bancorp
Given the investment horizon of 90 days Grupo Aval is expected to generate 8.67 times less return on investment than HV Bancorp. But when comparing it to its historical volatility, Grupo Aval is 1.01 times less risky than HV Bancorp. It trades about 0.01 of its potential returns per unit of risk. HV Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,780 in HV Bancorp on August 28, 2024 and sell it today you would earn a total of 680.00 from holding HV Bancorp or generate 24.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 23.74% |
| Values | Daily Returns |
Grupo Aval vs. HV Bancorp
Performance |
| Timeline |
| Grupo Aval |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Grupo Aval and HV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and HV Bancorp
The main advantage of trading using opposite Grupo Aval and HV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, HV Bancorp 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 HV Bancorp will offset losses from the drop in HV Bancorp's long position.| Grupo Aval vs. Banco Santander Brasil | Grupo Aval vs. CrossFirst Bankshares | Grupo Aval vs. Banco Bradesco SA | Grupo Aval vs. CF Bankshares |
| HV Bancorp vs. Magyar Bancorp | HV Bancorp vs. Home Federal Bancorp | HV Bancorp vs. Community West Bancshares | HV Bancorp vs. Lake Shore Bancorp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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