Correlation Between Banco Bradesco and Central Puerto
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Central Puerto 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 Central Puerto 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 Central Puerto SA, you can compare the effects of market volatilities on Banco Bradesco and Central Puerto 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 Central Puerto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Central Puerto.
Diversification Opportunities for Banco Bradesco and Central Puerto
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Central is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Central Puerto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Puerto 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 Central Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Puerto SA has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Central Puerto go up and down completely randomly.
Pair Corralation between Banco Bradesco and Central Puerto
Assuming the 90 days trading horizon Banco Bradesco DRC is expected to generate 0.8 times more return on investment than Central Puerto. However, Banco Bradesco DRC is 1.25 times less risky than Central Puerto. It trades about 0.14 of its potential returns per unit of risk. Central Puerto SA is currently generating about -0.03 per unit of risk. If you would invest 219,000 in Banco Bradesco DRC on October 20, 2024 and sell it today you would earn a total of 14,000 from holding Banco Bradesco DRC or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Banco Bradesco DRC vs. Central Puerto SA
Performance |
| Timeline |
| Banco Bradesco DRC |
| Central Puerto SA |
Banco Bradesco and Central Puerto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Central Puerto
The main advantage of trading using opposite Banco Bradesco and Central Puerto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Central Puerto 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 Central Puerto will offset losses from the drop in Central Puerto's long position.| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Grupo Financiero Galicia | Banco Bradesco vs. Banco Santander Ro | Banco Bradesco vs. Central Puerto SA |
| Central Puerto vs. Enel Generacion Costanera | Central Puerto vs. Edesa Holding SA | Central Puerto vs. Empresa Distribuidora Electrica |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |