Correlation Between Banco Da and Baumer SA
Can any of the company-specific risk be diversified away by investing in both Banco Da and Baumer SA 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 Banco Da and Baumer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco da Amaznia and Baumer SA, you can compare the effects of market volatilities on Banco Da and Baumer SA 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 Banco Da with a short position of Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Da and Baumer SA.
Diversification Opportunities for Banco Da and Baumer SA
Weak diversification
The 3 months correlation between Banco and Baumer is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Banco da Amaznia and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA and Banco Da 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 Banco da Amaznia are associated (or correlated) with Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Banco Da i.e., Banco Da and Baumer SA go up and down completely randomly.
Pair Corralation between Banco Da and Baumer SA
Assuming the 90 days trading horizon Banco da Amaznia is expected to generate 0.69 times more return on investment than Baumer SA. However, Banco da Amaznia is 1.44 times less risky than Baumer SA. It trades about 0.09 of its potential returns per unit of risk. Baumer SA is currently generating about 0.02 per unit of risk. If you would invest 4,350 in Banco da Amaznia on September 3, 2024 and sell it today you would earn a total of 4,063 from holding Banco da Amaznia or generate 93.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.37% |
| Values | Daily Returns |
Banco da Amaznia vs. Baumer SA
Performance |
| Timeline |
| Banco da Amaznia |
| Baumer SA |
Banco Da and Baumer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Da and Baumer SA
The main advantage of trading using opposite Banco Da and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Da position performs unexpectedly, Baumer SA 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 Baumer SA will offset losses from the drop in Baumer SA's long position.| Banco Da vs. WEG SA | Banco Da vs. Engie Brasil Energia | Banco Da vs. Vale SA | Banco Da vs. Magazine Luiza SA |
| Baumer SA vs. Baumer SA | Baumer SA vs. Biomm SA | Baumer SA vs. Bardella SA Indstrias | Baumer SA vs. Banco Alfa de |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |