Correlation Between CHINA TONTINE and Grupo Aval

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

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

Diversification Opportunities for CHINA TONTINE and Grupo Aval

0.0

Correlation Coefficient

CHINA TONTINE  Grupo Aval

Pay attention - limited upside

The 3 months correlation between CHINA and Grupo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and Grupo Aval Acciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval Acciones and CHINA TONTINE 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 CHINA TONTINE WINES are associated (or correlated) with Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval Acciones has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and Grupo Aval go up and down completely randomly.

Pair Corralation between CHINA TONTINE and Grupo Aval

If you would invest  192.00  in Grupo Aval Acciones on October 22, 2024 and sell it today you would earn a total of  22.00  from holding Grupo Aval Acciones or generate 11.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

CHINA TONTINE WINES  vs.  Grupo Aval Acciones

CHINA TONTINE WINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA TONTINE WINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, CHINA TONTINE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Grupo Aval Acciones

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aval Acciones are ranked lower than 14 (%) 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.

Pair Trading with CHINA TONTINE and Grupo Aval

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

The idea behind CHINA TONTINE WINES and Grupo Aval Acciones 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.