Correlation Between Visa and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Grupo Aval into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Grupo Aval Acciones, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Grupo Aval.
Diversification Opportunities for Visa and Grupo Aval
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Visa and Grupo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Grupo Aval Acciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval Acciones and Visa 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 Visa Class A 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 Acciones has no effect on the direction of Visa i.e., Visa and Grupo Aval go up and down completely randomly.
Pair Corralation between Visa and Grupo Aval
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.77 times more return on investment than Grupo Aval. However, Visa Class A is 1.29 times less risky than Grupo Aval. It trades about 0.34 of its potential returns per unit of risk. Grupo Aval Acciones is currently generating about 0.17 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Grupo Aval Acciones
Performance |
| Timeline |
| Visa Class A |
| Grupo Aval Acciones |
Visa and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Grupo Aval
The main advantage of trading using opposite Visa and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |