Correlation Between Banco De and Grupo Concesionario
Can any of the company-specific risk be diversified away by investing in both Banco De and Grupo Concesionario 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 Banco De and Grupo Concesionario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco de Valores and Grupo Concesionario del, you can compare the effects of market volatilities on Banco De and Grupo Concesionario 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 Banco De with a short position of Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Grupo Concesionario.
Diversification Opportunities for Banco De and Grupo Concesionario
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Grupo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Banco de Valores and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del and Banco De 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 Banco de Valores are associated (or correlated) with Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of Banco De i.e., Banco De and Grupo Concesionario go up and down completely randomly.
Pair Corralation between Banco De and Grupo Concesionario
Assuming the 90 days trading horizon Banco de Valores is expected to generate 0.63 times more return on investment than Grupo Concesionario. However, Banco de Valores is 1.58 times less risky than Grupo Concesionario. It trades about 0.27 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.14 per unit of risk. If you would invest 42,000 in Banco de Valores on October 20, 2024 and sell it today you would earn a total of 2,900 from holding Banco de Valores or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Banco de Valores vs. Grupo Concesionario del
Performance |
| Timeline |
| Banco de Valores |
| Grupo Concesionario del |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Banco De and Grupo Concesionario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Grupo Concesionario
The main advantage of trading using opposite Banco De and Grupo Concesionario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Grupo Concesionario 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 Concesionario will offset losses from the drop in Grupo Concesionario's long position.| Banco De vs. Matba Rofex SA | Banco De vs. Compania de Transporte | Banco De vs. American Express Co | Banco De vs. Transportadora de Gas |
| Grupo Concesionario vs. United States Steel | Grupo Concesionario vs. Compania de Transporte | Grupo Concesionario vs. Telecom Argentina | Grupo Concesionario vs. Agrometal SAI |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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