Correlation Between Banco Bradesco and First Financial
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and First Financial 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 First Financial 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 First Financial Bancorp, you can compare the effects of market volatilities on Banco Bradesco and First Financial 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 First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and First Financial.
Diversification Opportunities for Banco Bradesco and First Financial
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and First is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and First Financial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Bancorp 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 First Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Bancorp has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and First Financial go up and down completely randomly.
Pair Corralation between Banco Bradesco and First Financial
Considering the 90-day investment horizon Banco Bradesco is expected to generate 3.66 times less return on investment than First Financial. In addition to that, Banco Bradesco is 1.1 times more volatile than First Financial Bancorp. It trades about 0.01 of its total potential returns per unit of risk. First Financial Bancorp is currently generating about 0.04 per unit of volatility. If you would invest 2,330 in First Financial Bancorp on August 28, 2024 and sell it today you would earn a total of 704.00 from holding First Financial Bancorp or generate 30.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. First Financial Bancorp
Performance |
| Timeline |
| Banco Bradesco SA |
| First Financial Bancorp |
Banco Bradesco and First Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and First Financial
The main advantage of trading using opposite Banco Bradesco and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, First Financial 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 First Financial will offset losses from the drop in First Financial's long position.| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Banco Macro SA | Banco Bradesco vs. Lloyds Banking Group | Banco Bradesco vs. Grupo Financiero Galicia |
| First Financial vs. Fifth Third Bancorp | First Financial vs. Zions Bancorporation | First Financial vs. Huntington Bancshares Incorporated | First Financial vs. Comerica |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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