Correlation Between Banco Macro and Aluar Aluminio
Can any of the company-specific risk be diversified away by investing in both Banco Macro and Aluar Aluminio 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 Banco Macro and Aluar Aluminio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Macro SA and Aluar Aluminio Argentino, you can compare the effects of market volatilities on Banco Macro and Aluar Aluminio 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 Banco Macro with a short position of Aluar Aluminio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and Aluar Aluminio.
Diversification Opportunities for Banco Macro and Aluar Aluminio
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Banco and Aluar is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and Aluar Aluminio Argentino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluar Aluminio Argentino and Banco Macro 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 Banco Macro SA are associated (or correlated) with Aluar Aluminio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluar Aluminio Argentino has no effect on the direction of Banco Macro i.e., Banco Macro and Aluar Aluminio go up and down completely randomly.
Pair Corralation between Banco Macro and Aluar Aluminio
Assuming the 90 days trading horizon Banco Macro SA is expected to generate 2.47 times more return on investment than Aluar Aluminio. However, Banco Macro is 2.47 times more volatile than Aluar Aluminio Argentino. It trades about 0.13 of its potential returns per unit of risk. Aluar Aluminio Argentino is currently generating about -0.37 per unit of risk. If you would invest 1,110,000 in Banco Macro SA on October 20, 2024 and sell it today you would earn a total of 122,500 from holding Banco Macro SA or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Banco Macro SA vs. Aluar Aluminio Argentino
Performance |
| Timeline |
| Banco Macro SA |
| Aluar Aluminio Argentino |
Banco Macro and Aluar Aluminio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Macro and Aluar Aluminio
The main advantage of trading using opposite Banco Macro and Aluar Aluminio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, Aluar Aluminio 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 Aluar Aluminio will offset losses from the drop in Aluar Aluminio's long position.| Banco Macro vs. Banco Santander Ro | Banco Macro vs. Banco Patagonia | Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. Banco Hipotecario SA |
| Aluar Aluminio vs. American Express Co | Aluar Aluminio vs. QUALCOMM Incorporated | Aluar Aluminio vs. United States Steel | Aluar Aluminio vs. Pfizer Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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