Correlation Between Banco Bradesco and Halliburton
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Halliburton 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 Halliburton 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 Halliburton Co, you can compare the effects of market volatilities on Banco Bradesco and Halliburton 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 Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Halliburton.
Diversification Opportunities for Banco Bradesco and Halliburton
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and Halliburton is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Halliburton Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton 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 Halliburton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halliburton has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Halliburton go up and down completely randomly.
Pair Corralation between Banco Bradesco and Halliburton
Assuming the 90 days trading horizon Banco Bradesco is expected to generate 2.49 times less return on investment than Halliburton. In addition to that, Banco Bradesco is 1.68 times more volatile than Halliburton Co. It trades about 0.14 of its total potential returns per unit of risk. Halliburton Co is currently generating about 0.6 per unit of volatility. If you would invest 1,482,500 in Halliburton Co on October 20, 2024 and sell it today you would earn a total of 297,500 from holding Halliburton Co or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Banco Bradesco DRC vs. Halliburton Co
Performance |
| Timeline |
| Banco Bradesco DRC |
| Halliburton |
Banco Bradesco and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Halliburton
The main advantage of trading using opposite Banco Bradesco and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Halliburton 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 Halliburton will offset losses from the drop in Halliburton'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 |
| Halliburton vs. Camuzzi Gas Pampeana | Halliburton vs. Agrometal SAI | Halliburton vs. Telecom Argentina | Halliburton vs. Banco de Valores |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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