Correlation Between Banco Bradesco and Enel Generacion
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Enel Generacion 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 Enel Generacion 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 Enel Generacion Costanera, you can compare the effects of market volatilities on Banco Bradesco and Enel Generacion 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 Enel Generacion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Enel Generacion.
Diversification Opportunities for Banco Bradesco and Enel Generacion
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Enel is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Enel Generacion Costanera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Generacion Costanera 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 Enel Generacion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Generacion Costanera has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Enel Generacion go up and down completely randomly.
Pair Corralation between Banco Bradesco and Enel Generacion
Assuming the 90 days trading horizon Banco Bradesco is expected to generate 2.81 times less return on investment than Enel Generacion. But when comparing it to its historical volatility, Banco Bradesco DRC is 1.74 times less risky than Enel Generacion. It trades about 0.16 of its potential returns per unit of risk. Enel Generacion Costanera is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 48,350 in Enel Generacion Costanera on November 2, 2024 and sell it today you would earn a total of 11,950 from holding Enel Generacion Costanera or generate 24.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Banco Bradesco DRC vs. Enel Generacion Costanera
Performance |
| Timeline |
| Banco Bradesco DRC |
| Enel Generacion Costanera |
Banco Bradesco and Enel Generacion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Enel Generacion
The main advantage of trading using opposite Banco Bradesco and Enel Generacion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Enel Generacion 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 Enel Generacion will offset losses from the drop in Enel Generacion's long position.| Banco Bradesco vs. Compania de Transporte | Banco Bradesco vs. Harmony Gold Mining | Banco Bradesco vs. Transportadora de Gas | Banco Bradesco vs. Telecom Argentina |
| Enel Generacion vs. Boldt SA | Enel Generacion vs. Agrometal SAI | Enel Generacion vs. United States Steel | Enel Generacion vs. Capex SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |