Correlation Between Grupo Financiero and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Grupo Aval 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 Grupo Aval 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 Grupo Aval, you can compare the effects of market volatilities on Grupo Financiero and Grupo Aval 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 Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Grupo Aval.
Diversification Opportunities for Grupo Financiero and Grupo Aval
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and Grupo is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Grupo Aval in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval 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 Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Grupo Aval go up and down completely randomly.
Pair Corralation between Grupo Financiero and Grupo Aval
Given the investment horizon of 90 days Grupo Financiero Galicia is expected to under-perform the Grupo Aval. In addition to that, Grupo Financiero is 1.15 times more volatile than Grupo Aval. It trades about -0.02 of its total potential returns per unit of risk. Grupo Aval is currently generating about 0.58 per unit of volatility. If you would invest 208.00 in Grupo Aval on November 3, 2024 and sell it today you would earn a total of 72.00 from holding Grupo Aval or generate 34.62% 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. Grupo Aval
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Grupo Aval |
Grupo Financiero and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Grupo Aval
The main advantage of trading using opposite Grupo Financiero and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.| Grupo Financiero vs. Grupo Supervielle SA | Grupo Financiero vs. BBVA Banco Frances | Grupo Financiero vs. Itau Unibanco Banco | Grupo Financiero vs. Banco Bradesco SA |
| Grupo Aval vs. Banco De Chile | Grupo Aval vs. Banco Santander Chile | Grupo Aval vs. Credicorp | Grupo Aval vs. Foreign Trade Bank |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |