Correlation Between Aquagold International and Grupo Financiero

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

By analyzing existing cross correlation between Aquagold International and Grupo Financiero Inbursa, you can compare the effects of market volatilities on Aquagold International 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 Aquagold International with a short position of Grupo Financiero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Grupo Financiero.

Diversification Opportunities for Aquagold International and Grupo Financiero

-0.44

Correlation Coefficient

Aquagold International  Grupo Financiero

Very good diversification

The 3 months correlation between Aquagold and Grupo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Grupo Financiero Inbursa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Inbursa and Aquagold International 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 Aquagold International 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 Inbursa has no effect on the direction of Aquagold International i.e., Aquagold International and Grupo Financiero go up and down completely randomly.

Pair Corralation between Aquagold International and Grupo Financiero

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Grupo Financiero. In addition to that, Aquagold International is 2.17 times more volatile than Grupo Financiero Inbursa. It trades about -0.12 of its total potential returns per unit of risk. Grupo Financiero Inbursa is currently generating about 0.0 per unit of volatility. If you would invest  235.00  in Grupo Financiero Inbursa on December 29, 2024 and sell it today you would lose (6.00) from holding Grupo Financiero Inbursa or give up 2.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Aquagold International  vs.  Grupo Financiero Inbursa

Aquagold International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Grupo Financiero Inbursa

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aquagold International and Grupo Financiero

The main advantage of trading using opposite Aquagold International and Grupo Financiero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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.

The idea behind Aquagold International and Grupo Financiero Inbursa 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.