Correlation Between Banco Bradesco and MNB Holdings
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and MNB Holdings 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 MNB Holdings 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 MNB Holdings Corp, you can compare the effects of market volatilities on Banco Bradesco and MNB Holdings 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 MNB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and MNB Holdings.
Diversification Opportunities for Banco Bradesco and MNB Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and MNB is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and MNB Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNB Holdings Corp 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 MNB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNB Holdings Corp has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and MNB Holdings go up and down completely randomly.
Pair Corralation between Banco Bradesco and MNB Holdings
Assuming the 90 days trading horizon Banco Bradesco SA is expected to generate 3.57 times more return on investment than MNB Holdings. However, Banco Bradesco is 3.57 times more volatile than MNB Holdings Corp. It trades about 0.05 of its potential returns per unit of risk. MNB Holdings Corp is currently generating about -0.23 per unit of risk. If you would invest 1,144 in Banco Bradesco SA on October 21, 2024 and sell it today you would earn a total of 15.00 from holding Banco Bradesco SA or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Banco Bradesco SA vs. MNB Holdings Corp
Performance |
| Timeline |
| Banco Bradesco SA |
| MNB Holdings Corp |
Banco Bradesco and MNB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and MNB Holdings
The main advantage of trading using opposite Banco Bradesco and MNB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, MNB Holdings 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 MNB Holdings will offset losses from the drop in MNB Holdings' 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 |
| MNB Holdings vs. Harbor Bankshares | MNB Holdings vs. Oconee Financial | MNB Holdings vs. Mission Valley Bancorp | MNB Holdings vs. MF Bancorp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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