Correlation Between Grupo Financiero and Bayfirst Financial
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Bayfirst Financial 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 Bayfirst Financial 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 Bayfirst Financial Corp, you can compare the effects of market volatilities on Grupo Financiero and Bayfirst Financial 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 Bayfirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Bayfirst Financial.
Diversification Opportunities for Grupo Financiero and Bayfirst Financial
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Bayfirst is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Bayfirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayfirst Financial Corp 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 Bayfirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayfirst Financial Corp has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Bayfirst Financial go up and down completely randomly.
Pair Corralation between Grupo Financiero and Bayfirst Financial
Given the investment horizon of 90 days Grupo Financiero Galicia is expected to generate 1.13 times more return on investment than Bayfirst Financial. However, Grupo Financiero is 1.13 times more volatile than Bayfirst Financial Corp. It trades about 0.06 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about 0.04 per unit of risk. If you would invest 5,411 in Grupo Financiero Galicia on August 27, 2024 and sell it today you would earn a total of 137.00 from holding Grupo Financiero Galicia or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Bayfirst Financial Corp
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Bayfirst Financial Corp |
Grupo Financiero and Bayfirst Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Bayfirst Financial
The main advantage of trading using opposite Grupo Financiero and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Bayfirst Financial 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 Bayfirst Financial will offset losses from the drop in Bayfirst Financial'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 |
| Bayfirst Financial vs. Home Federal Bancorp | Bayfirst Financial vs. LINKBANCORP | Bayfirst Financial vs. Affinity Bancshares | Bayfirst Financial vs. BayCom Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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