Correlation Between Banco Bradesco and Grupo Clarin
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Grupo Clarin 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 Grupo Clarin 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 Grupo Clarin SA, you can compare the effects of market volatilities on Banco Bradesco and Grupo Clarin 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 Grupo Clarin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Grupo Clarin.
Diversification Opportunities for Banco Bradesco and Grupo Clarin
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Grupo is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Grupo Clarin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Clarin 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 Grupo Clarin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Clarin SA has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Grupo Clarin go up and down completely randomly.
Pair Corralation between Banco Bradesco and Grupo Clarin
Assuming the 90 days trading horizon Banco Bradesco DRC is expected to under-perform the Grupo Clarin. But the stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco DRC is 1.43 times less risky than Grupo Clarin. The stock trades about -0.58 of its potential returns per unit of risk. The Grupo Clarin SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 243,000 in Grupo Clarin SA on August 24, 2024 and sell it today you would earn a total of 9,500 from holding Grupo Clarin SA or generate 3.91% 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. Grupo Clarin SA
Performance |
| Timeline |
| Banco Bradesco DRC |
| Grupo Clarin SA |
Banco Bradesco and Grupo Clarin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Grupo Clarin
The main advantage of trading using opposite Banco Bradesco and Grupo Clarin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Grupo Clarin 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 Grupo Clarin will offset losses from the drop in Grupo Clarin's long position.| Banco Bradesco vs. Transportadora de Gas | Banco Bradesco vs. Agrometal SAI | Banco Bradesco vs. Harmony Gold Mining |
| Grupo Clarin vs. Compania de Transporte | Grupo Clarin vs. Harmony Gold Mining | Grupo Clarin vs. Transportadora de Gas | Grupo Clarin vs. Telecom Argentina |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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