Correlation Between HMN Financial and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Grupo Aval 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 HMN Financial and Grupo Aval into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Grupo Aval, you can compare the effects of market volatilities on HMN Financial and Grupo Aval 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 HMN Financial with a short position of Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Grupo Aval.
Diversification Opportunities for HMN Financial and Grupo Aval
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HMN and Grupo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Grupo Aval in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval and HMN Financial 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 HMN Financial are associated (or correlated) with Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval has no effect on the direction of HMN Financial i.e., HMN Financial and Grupo Aval go up and down completely randomly.
Pair Corralation between HMN Financial and Grupo Aval
Given the investment horizon of 90 days HMN Financial is expected to generate 1.4 times more return on investment than Grupo Aval. However, HMN Financial is 1.4 times more volatile than Grupo Aval. It trades about 0.12 of its potential returns per unit of risk. Grupo Aval is currently generating about -0.05 per unit of risk. If you would invest 2,184 in HMN Financial on August 28, 2024 and sell it today you would earn a total of 615.00 from holding HMN Financial or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.81% |
| Values | Daily Returns |
HMN Financial vs. Grupo Aval
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Grupo Aval |
HMN Financial and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Grupo Aval
The main advantage of trading using opposite HMN Financial and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.| HMN Financial vs. Magyar Bancorp | HMN Financial vs. Home Federal Bancorp | HMN Financial vs. First Financial Northwest | HMN Financial vs. First Northwest Bancorp |
| Grupo Aval vs. Banco Santander Brasil | Grupo Aval vs. CrossFirst Bankshares | Grupo Aval vs. Banco Bradesco SA | Grupo Aval vs. CF Bankshares |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |