Correlation Between Banco Bradesco and BOC Hong
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and BOC Hong 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 BOC Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bradesco SA and BOC Hong Kong, you can compare the effects of market volatilities on Banco Bradesco and BOC Hong 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 BOC Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and BOC Hong.
Diversification Opportunities for Banco Bradesco and BOC Hong
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Banco and BOC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and BOC Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOC Hong Kong 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 SA are associated (or correlated) with BOC Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOC Hong Kong has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and BOC Hong go up and down completely randomly.
Pair Corralation between Banco Bradesco and BOC Hong
Considering the 90-day investment horizon Banco Bradesco is expected to generate 8.63 times less return on investment than BOC Hong. In addition to that, Banco Bradesco is 1.69 times more volatile than BOC Hong Kong. It trades about 0.0 of its total potential returns per unit of risk. BOC Hong Kong is currently generating about 0.02 per unit of volatility. If you would invest 5,993 in BOC Hong Kong on September 22, 2024 and sell it today you would earn a total of 447.00 from holding BOC Hong Kong or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. BOC Hong Kong
Performance |
| Timeline |
| Banco Bradesco SA |
| BOC Hong Kong |
Banco Bradesco and BOC Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and BOC Hong
The main advantage of trading using opposite Banco Bradesco and BOC Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, BOC Hong 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 BOC Hong will offset losses from the drop in BOC Hong's long position.| Banco Bradesco vs. Shinhan Financial Group | Banco Bradesco vs. KB Financial Group | Banco Bradesco vs. Banco De Chile | Banco Bradesco vs. Orix Corp Ads |
| BOC Hong vs. Banco Bradesco SA | BOC Hong vs. Itau Unibanco Banco | BOC Hong vs. Lloyds Banking Group | BOC Hong vs. Deutsche Bank AG |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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