Correlation Between Banco Bradesco and Walmart
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Banco Bradesco and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Walmart.
Diversification Opportunities for Banco Bradesco and Walmart
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and Walmart is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Walmart go up and down completely randomly.
Pair Corralation between Banco Bradesco and Walmart
Assuming the 90 days trading horizon Banco Bradesco is expected to generate 1.04 times less return on investment than Walmart. In addition to that, Banco Bradesco is 2.84 times more volatile than Walmart. It trades about 0.16 of its total potential returns per unit of risk. Walmart is currently generating about 0.47 per unit of volatility. If you would invest 588,000 in Walmart on November 2, 2024 and sell it today you would earn a total of 57,000 from holding Walmart or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco DRC vs. Walmart
Performance |
| Timeline |
| Banco Bradesco DRC |
| Walmart |
Banco Bradesco and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Walmart
The main advantage of trading using opposite Banco Bradesco and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Banco Bradesco vs. Compania de Transporte | Banco Bradesco vs. Harmony Gold Mining | Banco Bradesco vs. Transportadora de Gas | Banco Bradesco vs. Telecom Argentina |
| Walmart vs. Compania de Transporte | Walmart vs. Agrometal SAI | Walmart vs. Harmony Gold Mining | Walmart 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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