Correlation Between Banco Do and China Minsh
Can any of the company-specific risk be diversified away by investing in both Banco Do and China Minsh 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 Do and China Minsh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco do Brasil and China Minsh, you can compare the effects of market volatilities on Banco Do and China Minsh 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 Do with a short position of China Minsh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Do and China Minsh.
Diversification Opportunities for Banco Do and China Minsh
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and China is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Banco do Brasil and China Minsh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsh and Banco Do 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 do Brasil are associated (or correlated) with China Minsh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsh has no effect on the direction of Banco Do i.e., Banco Do and China Minsh go up and down completely randomly.
Pair Corralation between Banco Do and China Minsh
Assuming the 90 days trading horizon Banco Do is expected to generate 64.26 times less return on investment than China Minsh. But when comparing it to its historical volatility, Banco do Brasil is 1.63 times less risky than China Minsh. It trades about 0.0 of its potential returns per unit of risk. China Minsh is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 369.00 in China Minsh on August 30, 2024 and sell it today you would earn a total of 19.00 from holding China Minsh or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Banco do Brasil vs. China Minsh
Performance |
| Timeline |
| Banco do Brasil |
| China Minsh |
Banco Do and China Minsh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Do and China Minsh
The main advantage of trading using opposite Banco Do and China Minsh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Do position performs unexpectedly, China Minsh 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 China Minsh will offset losses from the drop in China Minsh's long position.| Banco Do vs. Banco Bradesco SA | Banco Do vs. Petrleo Brasileiro SA | Banco Do vs. Ita Unibanco Holding | Banco Do vs. Itasa Investimentos |
| China Minsh vs. Hancock Whitney Corp | China Minsh vs. First Hawaiian | China Minsh vs. DBS Group Holdings | China Minsh vs. United Overseas Bank |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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