Correlation Between Affinity Bancshares and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares 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 Affinity Bancshares and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and Banco Bradesco SA, you can compare the effects of market volatilities on Affinity Bancshares 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 Affinity Bancshares with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Banco Bradesco.
Diversification Opportunities for Affinity Bancshares and Banco Bradesco
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Affinity and Banco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares 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 Affinity Bancshares 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 Affinity Bancshares 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 Affinity Bancshares i.e., Affinity Bancshares and Banco Bradesco go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Banco Bradesco
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 0.39 times more return on investment than Banco Bradesco. However, Affinity Bancshares is 2.56 times less risky than Banco Bradesco. It trades about 0.04 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about -0.11 per unit of risk. If you would invest 2,132 in Affinity Bancshares on August 24, 2024 and sell it today you would earn a total of 14.00 from holding Affinity Bancshares or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Affinity Bancshares vs. Banco Bradesco SA
Performance |
| Timeline |
| Affinity Bancshares |
| Banco Bradesco SA |
Affinity Bancshares and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Banco Bradesco
The main advantage of trading using opposite Affinity Bancshares and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares 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.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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