Correlation Between Banco Do and Greenville Federal
Can any of the company-specific risk be diversified away by investing in both Banco Do and Greenville Federal 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 Greenville Federal 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 Greenville Federal Financial, you can compare the effects of market volatilities on Banco Do and Greenville Federal 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 Greenville Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Do and Greenville Federal.
Diversification Opportunities for Banco Do and Greenville Federal
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Greenville is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banco do Brasil and Greenville Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenville Federal 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 Greenville Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenville Federal has no effect on the direction of Banco Do i.e., Banco Do and Greenville Federal go up and down completely randomly.
Pair Corralation between Banco Do and Greenville Federal
Assuming the 90 days trading horizon Banco do Brasil is expected to generate 1.03 times more return on investment than Greenville Federal. However, Banco Do is 1.03 times more volatile than Greenville Federal Financial. It trades about -0.15 of its potential returns per unit of risk. Greenville Federal Financial is currently generating about -0.31 per unit of risk. If you would invest 2,636 in Banco do Brasil on August 25, 2024 and sell it today you would lose (76.00) from holding Banco do Brasil or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Banco do Brasil vs. Greenville Federal Financial
Performance |
| Timeline |
| Banco do Brasil |
| Greenville Federal |
Banco Do and Greenville Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Do and Greenville Federal
The main advantage of trading using opposite Banco Do and Greenville Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Do position performs unexpectedly, Greenville Federal 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 Greenville Federal will offset losses from the drop in Greenville Federal'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 |
| Greenville Federal vs. Standard Bank Group | Greenville Federal vs. Bank Central Asia | Greenville Federal vs. PSB Holdings | Greenville Federal 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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