Correlation Between Grupo Financiero and Morixe Hermanos
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Morixe Hermanos 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 Morixe Hermanos 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 Morixe Hermanos SACI, you can compare the effects of market volatilities on Grupo Financiero and Morixe Hermanos 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 Morixe Hermanos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Morixe Hermanos.
Diversification Opportunities for Grupo Financiero and Morixe Hermanos
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and Morixe is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Morixe Hermanos SACI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morixe Hermanos SACI 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 Morixe Hermanos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morixe Hermanos SACI has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Morixe Hermanos go up and down completely randomly.
Pair Corralation between Grupo Financiero and Morixe Hermanos
Assuming the 90 days trading horizon Grupo Financiero is expected to generate 4.4 times less return on investment than Morixe Hermanos. But when comparing it to its historical volatility, Grupo Financiero Galicia is 2.24 times less risky than Morixe Hermanos. It trades about 0.08 of its potential returns per unit of risk. Morixe Hermanos SACI is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 28,750 in Morixe Hermanos SACI on August 31, 2024 and sell it today you would earn a total of 3,450 from holding Morixe Hermanos SACI or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Morixe Hermanos SACI
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Morixe Hermanos SACI |
Grupo Financiero and Morixe Hermanos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Morixe Hermanos
The main advantage of trading using opposite Grupo Financiero and Morixe Hermanos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Morixe Hermanos 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 Morixe Hermanos will offset losses from the drop in Morixe Hermanos' long position.| Grupo Financiero vs. Telecom Argentina | Grupo Financiero vs. Harmony Gold Mining | Grupo Financiero vs. Compania de Transporte | Grupo Financiero vs. Transportadora de Gas |
| Morixe Hermanos vs. Molinos Agro SA | Morixe Hermanos vs. Cresud SA | Morixe Hermanos vs. Longvie SA | Morixe Hermanos vs. American Express Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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