Correlation Between Grupo Aval and First Financial
Can any of the company-specific risk be diversified away by investing in both Grupo Aval and First 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 Aval and First Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aval and First Financial Bankshares, you can compare the effects of market volatilities on Grupo Aval and First 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 Aval with a short position of First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aval and First Financial.
Diversification Opportunities for Grupo Aval and First Financial
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and First is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aval and First Financial Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Bank and Grupo Aval 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 Aval are associated (or correlated) with First Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Bank has no effect on the direction of Grupo Aval i.e., Grupo Aval and First Financial go up and down completely randomly.
Pair Corralation between Grupo Aval and First Financial
Given the investment horizon of 90 days Grupo Aval is expected to generate 1.1 times more return on investment than First Financial. However, Grupo Aval is 1.1 times more volatile than First Financial Bankshares. It trades about 0.21 of its potential returns per unit of risk. First Financial Bankshares is currently generating about -0.16 per unit of risk. If you would invest 326.00 in Grupo Aval on August 20, 2025 and sell it today you would earn a total of 85.00 from holding Grupo Aval or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aval vs. First Financial Bankshares
Performance |
| Timeline |
| Grupo Aval |
| First Financial Bank |
Grupo Aval and First Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aval and First Financial
The main advantage of trading using opposite Grupo Aval and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aval position performs unexpectedly, First 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 First Financial will offset losses from the drop in First Financial's long position.| Grupo Aval vs. United Bankshares | Grupo Aval vs. Ameris Bancorp | Grupo Aval vs. Hancock Whitney Corp | Grupo Aval vs. Bank Ozk |
| First Financial vs. Atlantic Union Bankshares | First Financial vs. Axos Financial | First Financial vs. International Bancshares | First Financial vs. Inter Co Class |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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