Correlation Between Banco Bradesco and Summit Bank
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Summit Bank 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 Summit Bank 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 Summit Bank Group, you can compare the effects of market volatilities on Banco Bradesco and Summit Bank 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 Summit Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Summit Bank.
Diversification Opportunities for Banco Bradesco and Summit Bank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Summit is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Summit Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bank Group 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 Summit Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bank Group has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Summit Bank go up and down completely randomly.
Pair Corralation between Banco Bradesco and Summit Bank
Assuming the 90 days trading horizon Banco Bradesco SA is expected to under-perform the Summit Bank. But the preferred stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco SA is 3.02 times less risky than Summit Bank. The preferred stock trades about -0.11 of its potential returns per unit of risk. The Summit Bank Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,430 in Summit Bank Group on October 10, 2024 and sell it today you would lose (20.00) from holding Summit Bank Group or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Banco Bradesco SA vs. Summit Bank Group
Performance |
| Timeline |
| Banco Bradesco SA |
| Summit Bank Group |
Banco Bradesco and Summit Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Summit Bank
The main advantage of trading using opposite Banco Bradesco and Summit Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Summit Bank 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 Summit Bank will offset losses from the drop in Summit Bank'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 |
| Summit Bank vs. Savi Financial | Summit Bank vs. Pacific West Bancorp | Summit Bank vs. Commencement Bancorp | Summit Bank vs. Merchants Marine 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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