Correlation Between Grupo Aval and George Weston
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and George Weston 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 George Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval and George Weston Limited, you can compare the effects of market volatilities on Grupo Aval and George Weston 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 George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and George Weston.
Diversification Opportunities for Grupo Aval and George Weston
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and George is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and George Weston Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Weston Limited 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 George Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Weston Limited has no effect on the direction of Grupo Aval i.e., Grupo Aval and George Weston go up and down completely randomly.
Pair Corralation between Grupo Aval and George Weston
Given the investment horizon of 90 days Grupo Aval is expected to generate 5.43 times more return on investment than George Weston. However, Grupo Aval is 5.43 times more volatile than George Weston Limited. It trades about 0.36 of its potential returns per unit of risk. George Weston Limited is currently generating about 0.02 per unit of risk. If you would invest 241.00 in Grupo Aval on November 28, 2024 and sell it today you would earn a total of 74.00 from holding Grupo Aval or generate 30.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval vs. George Weston Limited
Performance |
| Timeline |
| Grupo Aval |
| George Weston Limited |
Grupo Aval and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and George Weston
The main advantage of trading using opposite Grupo Aval and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, George Weston 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 George Weston will offset losses from the drop in George Weston'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 |
| George Weston vs. Compania Cervecerias Unidas | George Weston vs. Boston Beer | George Weston vs. Ambev SA ADR | George Weston vs. Molson Coors Brewing |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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