Correlation Between Grupo Financiero and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and CF Bankshares 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 CF Bankshares 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 CF Bankshares, you can compare the effects of market volatilities on Grupo Financiero and CF Bankshares 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 CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and CF Bankshares.
Diversification Opportunities for Grupo Financiero and CF Bankshares
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grupo and CFBK is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares 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 CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and CF Bankshares go up and down completely randomly.
Pair Corralation between Grupo Financiero and CF Bankshares
Given the investment horizon of 90 days Grupo Financiero Galicia is expected to generate 0.98 times more return on investment than CF Bankshares. However, Grupo Financiero Galicia is 1.02 times less risky than CF Bankshares. It trades about 0.21 of its potential returns per unit of risk. CF Bankshares is currently generating about 0.2 per unit of risk. If you would invest 4,977 in Grupo Financiero Galicia on August 24, 2024 and sell it today you would earn a total of 616.00 from holding Grupo Financiero Galicia or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. CF Bankshares
Performance |
| Timeline |
| Grupo Financiero Galicia |
| CF Bankshares |
Grupo Financiero and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and CF Bankshares
The main advantage of trading using opposite Grupo Financiero and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' 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 |
| CF Bankshares vs. Banco Bradesco SA | CF Bankshares vs. Itau Unibanco Banco | CF Bankshares vs. Banco Santander Brasil | CF Bankshares vs. Western Alliance Bancorporation |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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