Correlation Between Southern California and Grupo Supervielle

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

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

Diversification Opportunities for Southern California and Grupo Supervielle

0.92

Correlation Coefficient

Southern California  Grupo Supervielle

Almost no diversification

The 3 months correlation between Southern and Grupo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Southern California Bancorp and Grupo Supervielle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Supervielle and Southern California 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 Southern California Bancorp 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 Southern California i.e., Southern California and Grupo Supervielle go up and down completely randomly.

Pair Corralation between Southern California and Grupo Supervielle

Given the investment horizon of 90 days Southern California is expected to generate 2.32 times less return on investment than Grupo Supervielle. But when comparing it to its historical volatility, Southern California Bancorp is 1.85 times less risky than Grupo Supervielle. It trades about 0.2 of its potential returns per unit of risk. Grupo Supervielle SA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  828.00  in Grupo Supervielle SA on September 13, 2024 and sell it today you would earn a total of  490.00  from holding Grupo Supervielle SA or generate 59.18% return on investment over 90 days.

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

Southern California Bancorp  vs.  Grupo Supervielle SA

Southern California

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Southern California Bancorp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Southern California disclosed solid returns over the last few months and may actually be approaching a breakup point.

Grupo Supervielle

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Supervielle SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Grupo Supervielle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Southern California and Grupo Supervielle

The main advantage of trading using opposite Southern California and Grupo Supervielle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern California 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 Southern California Bancorp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.