Correlation Between ACNB and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both ACNB and Banco Bradesco 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 ACNB and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACNB Corporation and Banco Bradesco SA, you can compare the effects of market volatilities on ACNB and Banco Bradesco 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 ACNB with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and Banco Bradesco.
Diversification Opportunities for ACNB and Banco Bradesco
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ACNB and Banco is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and Banco Bradesco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bradesco SA and ACNB 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 ACNB Corporation are associated (or correlated) with Banco Bradesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bradesco SA has no effect on the direction of ACNB i.e., ACNB and Banco Bradesco go up and down completely randomly.
Pair Corralation between ACNB and Banco Bradesco
Given the investment horizon of 90 days ACNB Corporation is expected to generate 3.18 times more return on investment than Banco Bradesco. However, ACNB is 3.18 times more volatile than Banco Bradesco SA. It trades about 0.17 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about -0.4 per unit of risk. If you would invest 4,223 in ACNB Corporation on August 28, 2024 and sell it today you would earn a total of 614.00 from holding ACNB Corporation or generate 14.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACNB Corp. vs. Banco Bradesco SA
Performance |
| Timeline |
| ACNB |
| Banco Bradesco SA |
ACNB and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACNB and Banco Bradesco
The main advantage of trading using opposite ACNB and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB position performs unexpectedly, Banco Bradesco 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 Bradesco will offset losses from the drop in Banco Bradesco's long position.The idea behind ACNB Corporation and Banco Bradesco SA 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.| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Banco Macro SA | Banco Bradesco vs. Lloyds Banking Group | Banco Bradesco vs. Grupo Financiero Galicia |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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