Correlation Between Grupo Supervielle and Grupo Aval

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

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

Diversification Opportunities for Grupo Supervielle and Grupo Aval

-0.67

Correlation Coefficient

Grupo Supervielle  Grupo Aval

Excellent diversification

The 3 months correlation between Grupo and Grupo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Supervielle SA and Grupo Aval in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval and Grupo Supervielle 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 Supervielle SA 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 has no effect on the direction of Grupo Supervielle i.e., Grupo Supervielle and Grupo Aval go up and down completely randomly.

Pair Corralation between Grupo Supervielle and Grupo Aval

Given the investment horizon of 90 days Grupo Supervielle is expected to generate 221.92 times less return on investment than Grupo Aval. In addition to that, Grupo Supervielle is 1.58 times more volatile than Grupo Aval. It trades about 0.0 of its total potential returns per unit of risk. Grupo Aval is currently generating about 0.18 per unit of volatility. If you would invest  205.00  in Grupo Aval on December 27, 2024 and sell it today you would earn a total of  70.00  from holding Grupo Aval or generate 34.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Grupo Supervielle SA  vs.  Grupo Aval

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.

Grupo Aval

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aval are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Grupo Aval disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Supervielle and Grupo Aval

The main advantage of trading using opposite Grupo Supervielle and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Supervielle 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 Grupo Supervielle SA and Grupo Aval 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.