Correlation Between Banco Actinver and Grupo Nacional

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

By analyzing existing cross correlation between Banco Actinver SA and Grupo Nacional Provincial, you can compare the effects of market volatilities on Banco Actinver and Grupo Nacional 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 Banco Actinver with a short position of Grupo Nacional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Actinver and Grupo Nacional.

Diversification Opportunities for Banco Actinver and Grupo Nacional

0.06

Correlation Coefficient

Banco Actinver  Grupo Nacional

Significant diversification

The 3 months correlation between Banco and Grupo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Banco Actinver SA and Grupo Nacional Provincial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Nacional Provincial and Banco Actinver 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 Banco Actinver SA are associated (or correlated) with Grupo Nacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Nacional Provincial has no effect on the direction of Banco Actinver i.e., Banco Actinver and Grupo Nacional go up and down completely randomly.

Pair Corralation between Banco Actinver and Grupo Nacional

Assuming the 90 days trading horizon Banco Actinver SA is expected to under-perform the Grupo Nacional. In addition to that, Banco Actinver is 4.12 times more volatile than Grupo Nacional Provincial. It trades about -0.22 of its total potential returns per unit of risk. Grupo Nacional Provincial is currently generating about 0.22 per unit of volatility. If you would invest  11,577  in Grupo Nacional Provincial on October 25, 2024 and sell it today you would earn a total of  423.00  from holding Grupo Nacional Provincial or generate 3.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Banco Actinver SA  vs.  Grupo Nacional Provincial

Banco Actinver SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Actinver SA 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 somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Grupo Nacional Provincial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Nacional Provincial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Banco Actinver and Grupo Nacional

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

The idea behind Banco Actinver SA and Grupo Nacional Provincial 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.