Correlation Between Grupo Financiero and Orix Corp
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Orix Corp 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 Financiero and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Financiero Galicia and Orix Corp Ads, you can compare the effects of market volatilities on Grupo Financiero and Orix Corp 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 Financiero with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Orix Corp.
Diversification Opportunities for Grupo Financiero and Orix Corp
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and Orix is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads and Grupo Financiero 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 Financiero Galicia are associated (or correlated) with Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Orix Corp go up and down completely randomly.
Pair Corralation between Grupo Financiero and Orix Corp
Given the investment horizon of 90 days Grupo Financiero Galicia is expected to generate 2.36 times more return on investment than Orix Corp. However, Grupo Financiero is 2.36 times more volatile than Orix Corp Ads. It trades about 0.22 of its potential returns per unit of risk. Orix Corp Ads is currently generating about -0.08 per unit of risk. If you would invest 5,551 in Grupo Financiero Galicia on September 26, 2024 and sell it today you would earn a total of 936.00 from holding Grupo Financiero Galicia or generate 16.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Financiero Galicia vs. Orix Corp Ads
Performance |
Timeline |
Grupo Financiero Galicia |
Orix Corp Ads |
Grupo Financiero and Orix Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Financiero and Orix Corp
The main advantage of trading using opposite Grupo Financiero and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Orix Corp 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 Orix Corp will offset losses from the drop in Orix Corp's long position.Grupo Financiero vs. Grupo Supervielle SA | Grupo Financiero vs. BBVA Banco Frances | Grupo Financiero vs. Itau Unibanco Banco | Grupo Financiero vs. Banco Bradesco SA |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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