Correlation Between Grupo Nacional and Genworth Financial

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

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

Diversification Opportunities for Grupo Nacional and Genworth Financial

0.0

Correlation Coefficient

Grupo Nacional  Genworth Financial

Pay attention - limited upside

The 3 months correlation between Grupo and Genworth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Nacional Provincial and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial and Grupo Nacional 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 Nacional Provincial are associated (or correlated) with Genworth Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genworth Financial has no effect on the direction of Grupo Nacional i.e., Grupo Nacional and Genworth Financial go up and down completely randomly.

Pair Corralation between Grupo Nacional and Genworth Financial

If you would invest  10,180  in Genworth Financial on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Genworth Financial or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grupo Nacional Provincial  vs.  Genworth Financial

Grupo Nacional Provincial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Nacional Provincial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Genworth Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genworth Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Genworth Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Nacional and Genworth Financial

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

The idea behind Grupo Nacional Provincial and Genworth Financial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..