Correlation Between Banco Do and FS Bancorp
Can any of the company-specific risk be diversified away by investing in both Banco Do and FS Bancorp 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 FS Bancorp 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 FS Bancorp, you can compare the effects of market volatilities on Banco Do and FS Bancorp 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 FS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Do and FS Bancorp.
Diversification Opportunities for Banco Do and FS Bancorp
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and FXLG is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Banco do Brasil and FS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Bancorp 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 FS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Bancorp has no effect on the direction of Banco Do i.e., Banco Do and FS Bancorp go up and down completely randomly.
Pair Corralation between Banco Do and FS Bancorp
Assuming the 90 days trading horizon Banco do Brasil is expected to under-perform the FS Bancorp. In addition to that, Banco Do is 1.98 times more volatile than FS Bancorp. It trades about -0.12 of its total potential returns per unit of risk. FS Bancorp is currently generating about 0.16 per unit of volatility. If you would invest 3,011 in FS Bancorp on August 29, 2024 and sell it today you would earn a total of 139.00 from holding FS Bancorp or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco do Brasil vs. FS Bancorp
Performance |
| Timeline |
| Banco do Brasil |
| FS Bancorp |
Banco Do and FS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Do and FS Bancorp
The main advantage of trading using opposite Banco Do and FS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Do position performs unexpectedly, FS Bancorp 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 FS Bancorp will offset losses from the drop in FS Bancorp'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 |
| FS Bancorp vs. Eastern Michigan Financial | FS Bancorp vs. Grand River Commerce | FS Bancorp vs. Bank of Botetourt | FS Bancorp vs. AmeriServ Financial |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |