Correlation Between Grupo Aval and UPD Holding
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and UPD Holding 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 UPD Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval and UPD Holding Corp, you can compare the effects of market volatilities on Grupo Aval and UPD Holding 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 UPD Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and UPD Holding.
Diversification Opportunities for Grupo Aval and UPD Holding
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and UPD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and UPD Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPD Holding 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 UPD Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPD Holding Corp has no effect on the direction of Grupo Aval i.e., Grupo Aval and UPD Holding go up and down completely randomly.
Pair Corralation between Grupo Aval and UPD Holding
Given the investment horizon of 90 days Grupo Aval is expected to generate 0.35 times more return on investment than UPD Holding. However, Grupo Aval is 2.83 times less risky than UPD Holding. It trades about 0.01 of its potential returns per unit of risk. UPD Holding Corp is currently generating about -0.08 per unit of risk. If you would invest 204.00 in Grupo Aval on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Grupo Aval or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval vs. UPD Holding Corp
Performance |
| Timeline |
| Grupo Aval |
| UPD Holding Corp |
Grupo Aval and UPD Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and UPD Holding
The main advantage of trading using opposite Grupo Aval and UPD Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, UPD Holding 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 UPD Holding will offset losses from the drop in UPD Holding'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 |
| UPD Holding vs. Federal National Mortgage | UPD Holding vs. Shinhan Financial Group | UPD Holding vs. Woori Financial Group | UPD Holding vs. Grupo Aval |
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 CEOs Directory module to screen CEOs from public companies around the world.
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