Correlation Between Zions Bancorporation and Grupo Financiero
Can any of the company-specific risk be diversified away by investing in both Zions Bancorporation and Grupo Financiero 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 Zions Bancorporation and Grupo Financiero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zions Bancorporation and Grupo Financiero Galicia, you can compare the effects of market volatilities on Zions Bancorporation and Grupo Financiero 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 Zions Bancorporation with a short position of Grupo Financiero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zions Bancorporation and Grupo Financiero.
Diversification Opportunities for Zions Bancorporation and Grupo Financiero
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zions and Grupo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Zions Bancorp. and Grupo Financiero Galicia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Galicia and Zions Bancorporation 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 Zions Bancorporation are associated (or correlated) with Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Galicia has no effect on the direction of Zions Bancorporation i.e., Zions Bancorporation and Grupo Financiero go up and down completely randomly.
Pair Corralation between Zions Bancorporation and Grupo Financiero
Given the investment horizon of 90 days Zions Bancorporation is expected to generate 1.61 times more return on investment than Grupo Financiero. However, Zions Bancorporation is 1.61 times more volatile than Grupo Financiero Galicia. It trades about 0.2 of its potential returns per unit of risk. Grupo Financiero Galicia is currently generating about 0.1 per unit of risk. If you would invest 5,176 in Zions Bancorporation on August 30, 2024 and sell it today you would earn a total of 892.00 from holding Zions Bancorporation or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zions Bancorp. vs. Grupo Financiero Galicia
Performance |
| Timeline |
| Zions Bancorporation |
| Grupo Financiero Galicia |
Zions Bancorporation and Grupo Financiero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zions Bancorporation and Grupo Financiero
The main advantage of trading using opposite Zions Bancorporation and Grupo Financiero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zions Bancorporation position performs unexpectedly, Grupo Financiero 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 Financiero will offset losses from the drop in Grupo Financiero's long position.| Zions Bancorporation vs. KeyCorp | Zions Bancorporation vs. Comerica | Zions Bancorporation vs. First Horizon National | Zions Bancorporation vs. Western Alliance Bancorporation |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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