Correlation Between Banco Bradesco and Pfizer
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Pfizer 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 Pfizer 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 Pfizer Inc, you can compare the effects of market volatilities on Banco Bradesco and Pfizer 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 Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Pfizer.
Diversification Opportunities for Banco Bradesco and Pfizer
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Pfizer is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Pfizer go up and down completely randomly.
Pair Corralation between Banco Bradesco and Pfizer
Assuming the 90 days trading horizon Banco Bradesco DRC is expected to generate 2.38 times more return on investment than Pfizer. However, Banco Bradesco is 2.38 times more volatile than Pfizer Inc. It trades about 0.14 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.28 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 Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Banco Bradesco DRC vs. Pfizer Inc
Performance |
| Timeline |
| Banco Bradesco DRC |
| Pfizer Inc |
Banco Bradesco and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Pfizer
The main advantage of trading using opposite Banco Bradesco and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer'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 |
| Pfizer vs. Transportadora de Gas | Pfizer vs. Agrometal SAI | Pfizer vs. Compania de Transporte | Pfizer 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |