Correlation Between Grupo Supervielle and Grupo Financiero

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

Diversification Opportunities for Grupo Supervielle and Grupo Financiero

0.98

Correlation Coefficient

Grupo Supervielle  Grupo Financiero

Almost no diversification

The 3 months correlation between Grupo and Grupo is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Supervielle SA and Grupo Financiero Galicia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Galicia 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 Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Galicia has no effect on the direction of Grupo Supervielle i.e., Grupo Supervielle and Grupo Financiero go up and down completely randomly.

Pair Corralation between Grupo Supervielle and Grupo Financiero

Given the investment horizon of 90 days Grupo Supervielle SA is expected to under-perform the Grupo Financiero. In addition to that, Grupo Supervielle is 1.41 times more volatile than Grupo Financiero Galicia. It trades about -0.14 of its total potential returns per unit of risk. Grupo Financiero Galicia is currently generating about -0.17 per unit of volatility. If you would invest  7,111  in Grupo Financiero Galicia on January 6, 2025 and sell it today you would lose (2,287) from holding Grupo Financiero Galicia or give up 32.16% 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.  Grupo Financiero Galicia

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 conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Grupo Financiero Galicia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Financiero Galicia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Grupo Supervielle and Grupo Financiero

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

The idea behind Grupo Supervielle SA and Grupo Financiero Galicia 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.