Correlation Between Grupo Financiero and Grupo Supervielle

Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Grupo Supervielle 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 Grupo Supervielle 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 Grupo Supervielle SA, you can compare the effects of market volatilities on Grupo Financiero and Grupo Supervielle 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 Grupo Supervielle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Grupo Supervielle.

Diversification Opportunities for Grupo Financiero and Grupo Supervielle

0.9

Correlation Coefficient

Grupo Financiero  Grupo Supervielle

Almost no diversification

The 3 months correlation between Grupo and Grupo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Grupo Supervielle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Supervielle 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 Grupo Supervielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Supervielle has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Grupo Supervielle go up and down completely randomly.

Pair Corralation between Grupo Financiero and Grupo Supervielle

Given the investment horizon of 90 days Grupo Financiero Galicia is expected to under-perform the Grupo Supervielle. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Financiero Galicia is 1.36 times less risky than Grupo Supervielle. The stock trades about -0.02 of its potential returns per unit of risk. The Grupo Supervielle SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,513  in Grupo Supervielle SA on December 28, 2024 and sell it today you would lose (105.00) from holding Grupo Supervielle SA or give up 6.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Grupo Financiero Galicia  vs.  Grupo Supervielle SA

Grupo Financiero Galicia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Financiero Galicia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Grupo Financiero is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Grupo Supervielle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Supervielle SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grupo Supervielle is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Grupo Financiero and Grupo Supervielle

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

The idea behind Grupo Financiero Galicia and Grupo Supervielle SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.