Correlation Between Grupo Financiero and Fiplasto
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Fiplasto 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 Fiplasto 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 Fiplasto SA, you can compare the effects of market volatilities on Grupo Financiero and Fiplasto 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 Fiplasto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Fiplasto.
Diversification Opportunities for Grupo Financiero and Fiplasto
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and Fiplasto is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Fiplasto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiplasto SA 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 Fiplasto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiplasto SA has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Fiplasto go up and down completely randomly.
Pair Corralation between Grupo Financiero and Fiplasto
Assuming the 90 days trading horizon Grupo Financiero Galicia is expected to generate 1.44 times more return on investment than Fiplasto. However, Grupo Financiero is 1.44 times more volatile than Fiplasto SA. It trades about 0.24 of its potential returns per unit of risk. Fiplasto SA is currently generating about 0.3 per unit of risk. If you would invest 620,000 in Grupo Financiero Galicia on September 24, 2024 and sell it today you would earn a total of 121,000 from holding Grupo Financiero Galicia or generate 19.52% 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. Fiplasto SA
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Fiplasto SA |
Grupo Financiero and Fiplasto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Fiplasto
The main advantage of trading using opposite Grupo Financiero and Fiplasto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Fiplasto 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 Fiplasto will offset losses from the drop in Fiplasto's long position.| Grupo Financiero vs. Banco Bradesco DRC | Grupo Financiero vs. Banco Santander Brasil | Grupo Financiero vs. Banco Santander Ro | Grupo Financiero vs. Agrometal SAI |
| Fiplasto vs. Longvie SA | Fiplasto vs. Domec Compania de | Fiplasto vs. Grupo Financiero Galicia | Fiplasto vs. Capex SA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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