Correlation Between Bayfirst Financial and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Bayfirst Financial 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 Bayfirst Financial and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayfirst Financial Corp and Banco Bradesco SA, you can compare the effects of market volatilities on Bayfirst Financial 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 Bayfirst Financial with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayfirst Financial and Banco Bradesco.
Diversification Opportunities for Bayfirst Financial and Banco Bradesco
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bayfirst and Banco is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bayfirst Financial 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 Bayfirst 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 Bayfirst Financial Corp 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 Bayfirst Financial i.e., Bayfirst Financial and Banco Bradesco go up and down completely randomly.
Pair Corralation between Bayfirst Financial and Banco Bradesco
Given the investment horizon of 90 days Bayfirst Financial Corp is expected to generate 1.14 times more return on investment than Banco Bradesco. However, Bayfirst Financial is 1.14 times more volatile than Banco Bradesco SA. It trades about 0.08 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about -0.27 per unit of risk. If you would invest 1,281 in Bayfirst Financial Corp on August 31, 2024 and sell it today you would earn a total of 44.00 from holding Bayfirst Financial Corp or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayfirst Financial Corp vs. Banco Bradesco SA
Performance |
| Timeline |
| Bayfirst Financial Corp |
| Banco Bradesco SA |
Bayfirst Financial and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayfirst Financial and Banco Bradesco
The main advantage of trading using opposite Bayfirst Financial and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayfirst Financial 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.| Bayfirst Financial vs. Home Federal Bancorp | Bayfirst Financial vs. LINKBANCORP | Bayfirst Financial vs. Affinity Bancshares | Bayfirst Financial vs. BayCom Corp |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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