Correlation Between Banco Bradesco and Credicorp
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Credicorp 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 Credicorp 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 Credicorp, you can compare the effects of market volatilities on Banco Bradesco and Credicorp 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 Credicorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Credicorp.
Diversification Opportunities for Banco Bradesco and Credicorp
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banco and Credicorp is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Credicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credicorp 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 Credicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credicorp has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Credicorp go up and down completely randomly.
Pair Corralation between Banco Bradesco and Credicorp
Given the investment horizon of 90 days Banco Bradesco SA is expected to under-perform the Credicorp. In addition to that, Banco Bradesco is 1.54 times more volatile than Credicorp. It trades about -0.08 of its total potential returns per unit of risk. Credicorp is currently generating about -0.04 per unit of volatility. If you would invest 18,933 in Credicorp on October 25, 2024 and sell it today you would lose (708.00) from holding Credicorp or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Credicorp
Performance |
| Timeline |
| Banco Bradesco SA |
| Credicorp |
Banco Bradesco and Credicorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Credicorp
The main advantage of trading using opposite Banco Bradesco and Credicorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Credicorp 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 Credicorp will offset losses from the drop in Credicorp's long position.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
| Credicorp vs. Heritage Financial | Credicorp vs. Home Federal Bancorp | Credicorp vs. Magyar Bancorp | Credicorp vs. National Bankshares |
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.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |