Correlation Between Banco Bradesco and Mirgor SA
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Mirgor SA 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 Mirgor SA 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 Mirgor SA, you can compare the effects of market volatilities on Banco Bradesco and Mirgor SA 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 Mirgor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Mirgor SA.
Diversification Opportunities for Banco Bradesco and Mirgor SA
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Mirgor is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Mirgor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirgor 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 Mirgor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirgor SA has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Mirgor SA go up and down completely randomly.
Pair Corralation between Banco Bradesco and Mirgor SA
Assuming the 90 days trading horizon Banco Bradesco DRC is expected to generate 1.98 times more return on investment than Mirgor SA. However, Banco Bradesco is 1.98 times more volatile than Mirgor SA. It trades about 0.14 of its potential returns per unit of risk. Mirgor SA is currently generating about 0.1 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. Mirgor SA
Performance |
| Timeline |
| Banco Bradesco DRC |
| Mirgor SA |
Banco Bradesco and Mirgor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Mirgor SA
The main advantage of trading using opposite Banco Bradesco and Mirgor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Mirgor SA 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 Mirgor SA will offset losses from the drop in Mirgor SA'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 |
| Mirgor SA vs. Aluar Aluminio Argentino | Mirgor SA vs. Central Puerto SA | Mirgor SA vs. Bolsas y Mercados | Mirgor SA vs. BBVA Banco Frances |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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