Correlation Between Banco Bradesco and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Banco Macro 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 Bradesco and Banco Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bradesco DRC and Banco Macro SA, you can compare the effects of market volatilities on Banco Bradesco and Banco Macro 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 Bradesco with a short position of Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Banco Macro.
Diversification Opportunities for Banco Bradesco and Banco Macro
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Banco is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Banco Bradesco 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 Bradesco DRC are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Banco Macro go up and down completely randomly.
Pair Corralation between Banco Bradesco and Banco Macro
Assuming the 90 days trading horizon Banco Bradesco DRC is expected to under-perform the Banco Macro. But the stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco DRC is 2.31 times less risky than Banco Macro. The stock trades about -0.58 of its potential returns per unit of risk. The Banco Macro SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 844,000 in Banco Macro SA on August 24, 2024 and sell it today you would earn a total of 43,000 from holding Banco Macro SA or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco DRC vs. Banco Macro SA
Performance |
| Timeline |
| Banco Bradesco DRC |
| Banco Macro SA |
Banco Bradesco and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Banco Macro
The main advantage of trading using opposite Banco Bradesco and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Banco Macro 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 Macro will offset losses from the drop in Banco Macro's long position.| Banco Bradesco vs. Grupo Financiero Galicia | Banco Bradesco vs. Banco Santander Ro | Banco Bradesco vs. Edesa Holding SA | Banco Bradesco vs. American Express Co |
| Banco Macro vs. Transportadora de Gas | Banco Macro vs. Harmony Gold Mining | Banco Macro vs. United States Steel | Banco Macro vs. Agrometal SAI |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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