Correlation Between Grupo Financiero and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Agrometal SAI 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 Financiero and Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Financiero Galicia and Agrometal SAI, you can compare the effects of market volatilities on Grupo Financiero and Agrometal SAI 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 Financiero with a short position of Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Agrometal SAI.
Diversification Opportunities for Grupo Financiero and Agrometal SAI
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and Agrometal is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and Grupo Financiero 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 Financiero Galicia are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Agrometal SAI go up and down completely randomly.
Pair Corralation between Grupo Financiero and Agrometal SAI
Assuming the 90 days trading horizon Grupo Financiero is expected to generate 6.9 times less return on investment than Agrometal SAI. But when comparing it to its historical volatility, Grupo Financiero Galicia is 2.03 times less risky than Agrometal SAI. It trades about 0.14 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 5,650 in Agrometal SAI on September 4, 2024 and sell it today you would earn a total of 2,690 from holding Agrometal SAI or generate 47.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Agrometal SAI
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Agrometal SAI |
Grupo Financiero and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Agrometal SAI
The main advantage of trading using opposite Grupo Financiero and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| Grupo Financiero vs. Agrometal SAI | Grupo Financiero vs. United States Steel | Grupo Financiero vs. Harmony Gold Mining | Grupo Financiero vs. Compania de Transporte |
| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. Telecom Argentina | Agrometal SAI vs. Transportadora de Gas |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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