Correlation Between Banco Bradesco and Community Bankers
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Community Bankers 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 Community Bankers 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 Community Bankers, you can compare the effects of market volatilities on Banco Bradesco and Community Bankers 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 Community Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Community Bankers.
Diversification Opportunities for Banco Bradesco and Community Bankers
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Community is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Community Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Bankers 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 Community Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Bankers has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Community Bankers go up and down completely randomly.
Pair Corralation between Banco Bradesco and Community Bankers
Assuming the 90 days trading horizon Banco Bradesco SA is expected to under-perform the Community Bankers. But the preferred stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco SA is 1.68 times less risky than Community Bankers. The preferred stock trades about -0.15 of its potential returns per unit of risk. The Community Bankers is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 401.00 in Community Bankers on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Community Bankers or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Banco Bradesco SA vs. Community Bankers
Performance |
| Timeline |
| Banco Bradesco SA |
| Community Bankers |
Banco Bradesco and Community Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Community Bankers
The main advantage of trading using opposite Banco Bradesco and Community Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Community Bankers 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 Community Bankers will offset losses from the drop in Community Bankers' long position.| Banco Bradesco vs. Banco Alfa de | Banco Bradesco vs. Banestes SA | Banco Bradesco vs. Banco da Amaznia | Banco Bradesco vs. Financeira Alfa SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |