Correlation Between Grupo Aval and Wallbox NV

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

By analyzing existing cross correlation between Grupo Aval and Wallbox NV WT, you can compare the effects of market volatilities on Grupo Aval and Wallbox NV 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 Wallbox NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and Wallbox NV.

Diversification Opportunities for Grupo Aval and Wallbox NV

-0.57

Correlation Coefficient

Grupo Aval  Wallbox NV

Excellent diversification

The 3 months correlation between Grupo and Wallbox is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and Wallbox NV WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbox NV WT 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 are associated (or correlated) with Wallbox NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbox NV WT has no effect on the direction of Grupo Aval i.e., Grupo Aval and Wallbox NV go up and down completely randomly.

Pair Corralation between Grupo Aval and Wallbox NV

Given the investment horizon of 90 days Grupo Aval is expected to generate 47.02 times less return on investment than Wallbox NV. But when comparing it to its historical volatility, Grupo Aval is 10.37 times less risky than Wallbox NV. It trades about 0.01 of its potential returns per unit of risk. Wallbox NV WT is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  69.00  in Wallbox NV WT on October 8, 2024 and sell it today you would lose (66.00) from holding Wallbox NV WT or give up 95.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.31%
Values	Daily Returns

Grupo Aval  vs.  Wallbox NV WT

Grupo Aval

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aval are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Grupo Aval may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Wallbox NV WT

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wallbox NV WT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Wallbox NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Aval and Wallbox NV

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

The idea behind Grupo Aval and Wallbox NV WT 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.