Correlation Between Banco Bradesco and Exxon Mobil
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Exxon Mobil 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 Exxon Mobil 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 Exxon Mobil, you can compare the effects of market volatilities on Banco Bradesco and Exxon Mobil 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 Exxon Mobil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Exxon Mobil.
Diversification Opportunities for Banco Bradesco and Exxon Mobil
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Exxon is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Exxon Mobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil 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 Exxon Mobil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Exxon Mobil go up and down completely randomly.
Pair Corralation between Banco Bradesco and Exxon Mobil
Assuming the 90 days trading horizon Banco Bradesco SA is expected to under-perform the Exxon Mobil. But the preferred stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco SA is 1.07 times less risky than Exxon Mobil. The preferred stock trades about -0.23 of its potential returns per unit of risk. The Exxon Mobil is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,626 in Exxon Mobil on September 12, 2024 and sell it today you would lose (63.00) from holding Exxon Mobil or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Exxon Mobil
Performance |
| Timeline |
| Banco Bradesco SA |
| Exxon Mobil |
Banco Bradesco and Exxon Mobil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Exxon Mobil
The main advantage of trading using opposite Banco Bradesco and Exxon Mobil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Exxon Mobil 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 Exxon Mobil will offset losses from the drop in Exxon Mobil's long position.| Banco Bradesco vs. Ita Unibanco Holding | Banco Bradesco vs. Banco do Brasil | Banco Bradesco vs. Itasa Investimentos | Banco Bradesco vs. Petrleo Brasileiro SA |
| Exxon Mobil vs. OSX Brasil SA | Exxon Mobil vs. Energisa SA | Exxon Mobil vs. BTG Pactual Logstica | Exxon Mobil vs. Plano Plano Desenvolvimento |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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