Correlation Between Grupo Financiero and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Financiero Inbursa and Dow Jones Industrial, you can compare the effects of market volatilities on Grupo Financiero and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Dow Jones.
Diversification Opportunities for Grupo Financiero and Dow Jones
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Dow is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Inbursa and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Inbursa are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Dow Jones go up and down completely randomly.
Pair Corralation between Grupo Financiero and Dow Jones
Assuming the 90 days horizon Grupo Financiero Inbursa is expected to under-perform the Dow Jones. In addition to that, Grupo Financiero is 3.65 times more volatile than Dow Jones Industrial. It trades about -0.22 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of volatility. If you would invest 4,284,026 in Dow Jones Industrial on October 21, 2024 and sell it today you would earn a total of 64,757 from holding Dow Jones Industrial or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Grupo Financiero Inbursa vs. Dow Jones Industrial
Performance |
| Timeline |
Grupo Financiero and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Grupo Financiero Inbursa
Pair trading matchups for Grupo Financiero
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Grupo Financiero and Dow Jones
The main advantage of trading using opposite Grupo Financiero and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Grupo Financiero vs. National Bank of | Grupo Financiero vs. Absa Group Limited | Grupo Financiero vs. Aozora Bank Ltd | Grupo Financiero vs. Andover Bancorp |
| Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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