Correlation Between Grupo Aval and Sartorius Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Grupo Aval and Sartorius Aktiengesellscha 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 Aval and Sartorius Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Aval Acciones and Sartorius Aktiengesellschaft, you can compare the effects of market volatilities on Grupo Aval and Sartorius Aktiengesellscha 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 Aval with a short position of Sartorius Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Sartorius Aktiengesellscha.

Diversification Opportunities for Grupo Aval and Sartorius Aktiengesellscha

-0.65

Correlation Coefficient

Grupo Aval  Sartorius Aktiengesellscha

Excellent diversification

The 3 months correlation between Grupo and Sartorius is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval Acciones and Sartorius Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Aktiengesellscha and Grupo Aval 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 Aval Acciones are associated (or correlated) with Sartorius Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Aktiengesellscha has no effect on the direction of Grupo Aval i.e., Grupo Aval and Sartorius Aktiengesellscha go up and down completely randomly.

Pair Corralation between Grupo Aval and Sartorius Aktiengesellscha

Assuming the 90 days trading horizon Grupo Aval Acciones is expected to generate 0.63 times more return on investment than Sartorius Aktiengesellscha. However, Grupo Aval Acciones is 1.58 times less risky than Sartorius Aktiengesellscha. It trades about 0.13 of its potential returns per unit of risk. Sartorius Aktiengesellschaft is currently generating about 0.0 per unit of risk. If you would invest  175.00  in Grupo Aval Acciones on September 13, 2024 and sell it today you would earn a total of  25.00  from holding Grupo Aval Acciones or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Grupo Aval Acciones  vs.  Sartorius Aktiengesellschaft

Grupo Aval Acciones

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aval Acciones are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Grupo Aval reported solid returns over the last few months and may actually be approaching a breakup point.

Sartorius Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sartorius Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sartorius Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grupo Aval and Sartorius Aktiengesellscha

The main advantage of trading using opposite Grupo Aval and Sartorius Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, Sartorius Aktiengesellscha 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 Sartorius Aktiengesellscha will offset losses from the drop in Sartorius Aktiengesellscha's long position.

The idea behind Grupo Aval Acciones and Sartorius Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..