Correlation Between Banco Bradesco and Bank Negara
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Bank Negara 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 Bank Negara 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 Bank Negara Indonesia, you can compare the effects of market volatilities on Banco Bradesco and Bank Negara 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 Bank Negara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Bank Negara.
Diversification Opportunities for Banco Bradesco and Bank Negara
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and Bank is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Bank Negara Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Negara Indonesia 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 Bank Negara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Negara Indonesia has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Bank Negara go up and down completely randomly.
Pair Corralation between Banco Bradesco and Bank Negara
Considering the 90-day investment horizon Banco Bradesco SA is expected to under-perform the Bank Negara. But the stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco SA is 4.06 times less risky than Bank Negara. The stock trades about -0.02 of its potential returns per unit of risk. The Bank Negara Indonesia is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,425 in Bank Negara Indonesia on September 2, 2024 and sell it today you would earn a total of 120.00 from holding Bank Negara Indonesia or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Bank Negara Indonesia
Performance |
| Timeline |
| Banco Bradesco SA |
| Bank Negara Indonesia |
Banco Bradesco and Bank Negara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Bank Negara
The main advantage of trading using opposite Banco Bradesco and Bank Negara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Bank Negara 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 Bank Negara will offset losses from the drop in Bank Negara's long position.| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. CrossFirst Bankshares | Banco Bradesco vs. Banco Bradesco SA | Banco Bradesco vs. CF Bankshares |
| Bank Negara vs. Piraeus Bank SA | Bank Negara vs. Turkiye Garanti Bankasi | Bank Negara vs. Uwharrie Capital Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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