Correlation Between Grupo Financiero and Instituto Rosenbusch
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Instituto Rosenbusch 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 Instituto Rosenbusch 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 Instituto Rosenbusch SA, you can compare the effects of market volatilities on Grupo Financiero and Instituto Rosenbusch 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 Instituto Rosenbusch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Instituto Rosenbusch.
Diversification Opportunities for Grupo Financiero and Instituto Rosenbusch
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and Instituto is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Instituto Rosenbusch SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instituto Rosenbusch 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 Instituto Rosenbusch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instituto Rosenbusch has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Instituto Rosenbusch go up and down completely randomly.
Pair Corralation between Grupo Financiero and Instituto Rosenbusch
Assuming the 90 days trading horizon Grupo Financiero Galicia is expected to generate 0.77 times more return on investment than Instituto Rosenbusch. However, Grupo Financiero Galicia is 1.3 times less risky than Instituto Rosenbusch. It trades about 0.16 of its potential returns per unit of risk. Instituto Rosenbusch SA is currently generating about 0.07 per unit of risk. If you would invest 526,000 in Grupo Financiero Galicia on November 2, 2024 and sell it today you would earn a total of 295,000 from holding Grupo Financiero Galicia or generate 56.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.08% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Instituto Rosenbusch SA
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Instituto Rosenbusch |
Grupo Financiero and Instituto Rosenbusch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Instituto Rosenbusch
The main advantage of trading using opposite Grupo Financiero and Instituto Rosenbusch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Instituto Rosenbusch 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 Instituto Rosenbusch will offset losses from the drop in Instituto Rosenbusch's long position.| Grupo Financiero vs. Agrometal SAI | Grupo Financiero vs. Compania de Transporte | Grupo Financiero vs. United States Steel | Grupo Financiero vs. Telecom Argentina |
| Instituto Rosenbusch vs. Compania de Transporte | Instituto Rosenbusch vs. Harmony Gold Mining | Instituto Rosenbusch vs. Agrometal SAI | Instituto Rosenbusch vs. United States Steel |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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