Correlation Between Grupo Financiero and Transportadora
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Grupo Financiero and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Transportadora.
Diversification Opportunities for Grupo Financiero and Transportadora
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grupo and Transportadora is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Transportadora go up and down completely randomly.
Pair Corralation between Grupo Financiero and Transportadora
Given the investment horizon of 90 days Grupo Financiero is expected to generate 10.03 times less return on investment than Transportadora. But when comparing it to its historical volatility, Grupo Financiero Galicia is 1.24 times less risky than Transportadora. It trades about 0.06 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 2,216 in Transportadora de Gas on August 27, 2024 and sell it today you would earn a total of 762.00 from holding Transportadora de Gas or generate 34.39% 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. Transportadora de Gas
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Transportadora de Gas |
Grupo Financiero and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Transportadora
The main advantage of trading using opposite Grupo Financiero and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora'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 |
| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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