Correlation Between CrossFirst Bankshares and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both CrossFirst Bankshares and Grupo Aval 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 CrossFirst Bankshares and Grupo Aval into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CrossFirst Bankshares and Grupo Aval, you can compare the effects of market volatilities on CrossFirst Bankshares and Grupo Aval 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 CrossFirst Bankshares with a short position of Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of CrossFirst Bankshares and Grupo Aval.
Diversification Opportunities for CrossFirst Bankshares and Grupo Aval
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CrossFirst and Grupo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and Grupo Aval in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval and CrossFirst Bankshares 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 CrossFirst Bankshares are associated (or correlated) with Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and Grupo Aval go up and down completely randomly.
Pair Corralation between CrossFirst Bankshares and Grupo Aval
Considering the 90-day investment horizon CrossFirst Bankshares is expected to generate 2.27 times more return on investment than Grupo Aval. However, CrossFirst Bankshares is 2.27 times more volatile than Grupo Aval. It trades about 0.13 of its potential returns per unit of risk. Grupo Aval is currently generating about 0.1 per unit of risk. If you would invest 1,605 in CrossFirst Bankshares on August 30, 2024 and sell it today you would earn a total of 152.00 from holding CrossFirst Bankshares or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CrossFirst Bankshares vs. Grupo Aval
Performance |
| Timeline |
| CrossFirst Bankshares |
| Grupo Aval |
CrossFirst Bankshares and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CrossFirst Bankshares and Grupo Aval
The main advantage of trading using opposite CrossFirst Bankshares and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CrossFirst Bankshares position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
| Grupo Aval vs. Banco De Chile | Grupo Aval vs. Banco Santander Chile | Grupo Aval vs. Credicorp | Grupo Aval vs. Foreign Trade Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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