Correlation Between Gentera SAB and Banco Del

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

By analyzing existing cross correlation between Gentera SAB de and Banco del Bajo, you can compare the effects of market volatilities on Gentera SAB and Banco Del 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 Gentera SAB with a short position of Banco Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentera SAB and Banco Del.

Diversification Opportunities for Gentera SAB and Banco Del

-0.66

Correlation Coefficient

Gentera SAB  Banco Del

Excellent diversification

The 3 months correlation between Gentera and Banco is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gentera SAB de and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo and Gentera SAB 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 Gentera SAB de are associated (or correlated) with Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of Gentera SAB i.e., Gentera SAB and Banco Del go up and down completely randomly.

Pair Corralation between Gentera SAB and Banco Del

Assuming the 90 days trading horizon Gentera SAB de is expected to generate 0.88 times more return on investment than Banco Del. However, Gentera SAB de is 1.14 times less risky than Banco Del. It trades about 0.07 of its potential returns per unit of risk. Banco del Bajo is currently generating about -0.04 per unit of risk. If you would invest  2,276  in Gentera SAB de on September 13, 2024 and sell it today you would earn a total of  362.00  from holding Gentera SAB de or generate 15.91% return on investment over 90 days.

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

Gentera SAB de  vs.  Banco del Bajo

Gentera SAB de

Risk-Adjusted Performance

14 of 100

Good

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

Banco del Bajo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco del Bajo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking indicators, Banco Del is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gentera SAB and Banco Del

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

The idea behind Gentera SAB de and Banco del Bajo 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.