Correlation Between Grupo Financiero and Alphabet
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Alphabet 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 Alphabet 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 Alphabet Inc Class A CEDEAR, you can compare the effects of market volatilities on Grupo Financiero and Alphabet 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 Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Alphabet.
Diversification Opportunities for Grupo Financiero and Alphabet
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Alphabet is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Alphabet Inc Class A CEDEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet Class A 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 Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet Class A has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Alphabet go up and down completely randomly.
Pair Corralation between Grupo Financiero and Alphabet
Assuming the 90 days trading horizon Grupo Financiero Galicia is expected to generate 1.23 times more return on investment than Alphabet. However, Grupo Financiero is 1.23 times more volatile than Alphabet Inc Class A CEDEAR. It trades about 0.19 of its potential returns per unit of risk. Alphabet Inc Class A CEDEAR is currently generating about 0.13 per unit of risk. If you would invest 52,170 in Grupo Financiero Galicia on August 30, 2024 and sell it today you would earn a total of 564,830 from holding Grupo Financiero Galicia or generate 1082.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Alphabet Inc Class A CEDEAR
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Alphabet Class A |
Grupo Financiero and Alphabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Alphabet
The main advantage of trading using opposite Grupo Financiero and Alphabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Alphabet 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 Alphabet will offset losses from the drop in Alphabet's long position.| Grupo Financiero vs. Banco Bradesco DRC | Grupo Financiero vs. Vista Energy, SAB | Grupo Financiero vs. United States Steel | Grupo Financiero vs. Central Puerto 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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