Correlation Between Grupo Financiero and National Bank
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on Grupo Financiero and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and National Bank.
Diversification Opportunities for Grupo Financiero and National Bank
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and National is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Inbursa and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and National Bank go up and down completely randomly.
Pair Corralation between Grupo Financiero and National Bank
Assuming the 90 days horizon Grupo Financiero Inbursa is expected to generate 0.85 times more return on investment than National Bank. However, Grupo Financiero Inbursa is 1.17 times less risky than National Bank. It trades about -0.03 of its potential returns per unit of risk. National Bank of is currently generating about -0.08 per unit of risk. If you would invest 224.00 in Grupo Financiero Inbursa on September 5, 2024 and sell it today you would lose (9.00) from holding Grupo Financiero Inbursa or give up 4.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Inbursa vs. National Bank of
Performance |
| Timeline |
| Grupo Financiero Inbursa |
| National Bank |
Grupo Financiero and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and National Bank
The main advantage of trading using opposite Grupo Financiero and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's 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 |
| National Bank vs. Alpha Bank SA | National Bank vs. Eurobank Ergasias SA | National Bank vs. Piraeus Bank SA | National Bank vs. PT Bank Central |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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