Correlation Between Banco Bradesco and Lifestore Financial
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Lifestore 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 Lifestore 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 Lifestore Financial Group, you can compare the effects of market volatilities on Banco Bradesco and Lifestore 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 Lifestore Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Lifestore Financial.
Diversification Opportunities for Banco Bradesco and Lifestore Financial
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Lifestore is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Lifestore Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestore Financial 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 Lifestore Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestore Financial has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Lifestore Financial go up and down completely randomly.
Pair Corralation between Banco Bradesco and Lifestore Financial
If you would invest 3,900 in Lifestore Financial Group on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Lifestore Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Banco Bradesco SA vs. Lifestore Financial Group
Performance |
| Timeline |
| Banco Bradesco SA |
| Lifestore Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Banco Bradesco and Lifestore Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Lifestore Financial
The main advantage of trading using opposite Banco Bradesco and Lifestore Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Lifestore 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 Lifestore Financial will offset losses from the drop in Lifestore Financial'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 |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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