Correlation Between Grupo Supervielle and BBVA Banco

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

Diversification Opportunities for Grupo Supervielle and BBVA Banco

0.91

Correlation Coefficient

Grupo Supervielle  BBVA Banco

Almost no diversification

The 3 months correlation between Grupo and BBVA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Supervielle SA and BBVA Banco Frances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBVA Banco Frances 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 BBVA Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBVA Banco Frances has no effect on the direction of Grupo Supervielle i.e., Grupo Supervielle and BBVA Banco go up and down completely randomly.

Pair Corralation between Grupo Supervielle and BBVA Banco

Given the investment horizon of 90 days Grupo Supervielle is expected to generate 32.46 times less return on investment than BBVA Banco. In addition to that, Grupo Supervielle is 1.1 times more volatile than BBVA Banco Frances. It trades about 0.0 of its total potential returns per unit of risk. BBVA Banco Frances is currently generating about 0.02 per unit of volatility. If you would invest  1,968  in BBVA Banco Frances on December 27, 2024 and sell it today you would lose (10.00) from holding BBVA Banco Frances or give up 0.51% of portfolio value over 90 days.

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

Grupo Supervielle SA  vs.  BBVA Banco Frances

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.

BBVA Banco Frances

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BBVA Banco Frances are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, BBVA Banco is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Grupo Supervielle and BBVA Banco

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

The idea behind Grupo Supervielle SA and BBVA Banco Frances 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.