Correlation Between Bread Financial and CASAN Companhia
Can any of the company-specific risk be diversified away by investing in both Bread Financial and CASAN Companhia 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 Bread Financial and CASAN Companhia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and CASAN Companhia, you can compare the effects of market volatilities on Bread Financial and CASAN Companhia 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 Bread Financial with a short position of CASAN Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and CASAN Companhia.
Diversification Opportunities for Bread Financial and CASAN Companhia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bread and CASAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and CASAN Companhia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CASAN Companhia and Bread Financial 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 Bread Financial Holdings are associated (or correlated) with CASAN Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CASAN Companhia has no effect on the direction of Bread Financial i.e., Bread Financial and CASAN Companhia go up and down completely randomly.
Pair Corralation between Bread Financial and CASAN Companhia
If you would invest 7,403 in Bread Financial Holdings on September 4, 2024 and sell it today you would earn a total of 1,943 from holding Bread Financial Holdings or generate 26.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bread Financial Holdings vs. CASAN Companhia
Performance |
| Timeline |
| Bread Financial Holdings |
| CASAN Companhia |
Bread Financial and CASAN Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and CASAN Companhia
The main advantage of trading using opposite Bread Financial and CASAN Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, CASAN Companhia 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 CASAN Companhia will offset losses from the drop in CASAN Companhia's long position.The idea behind Bread Financial Holdings and CASAN Companhia 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.| CASAN Companhia vs. The Trade Desk | CASAN Companhia vs. STMicroelectronics NV | CASAN Companhia vs. Bemobi Mobile Tech | CASAN Companhia vs. Cognizant Technology Solutions |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |