Correlation Between Banco Bradesco and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Banco Macro 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 Banco Macro 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 Banco Macro SA, you can compare the effects of market volatilities on Banco Bradesco and Banco Macro 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 Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Banco Macro.
Diversification Opportunities for Banco Bradesco and Banco Macro
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Banco is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA 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 Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Banco Macro go up and down completely randomly.
Pair Corralation between Banco Bradesco and Banco Macro
Given the investment horizon of 90 days Banco Bradesco is expected to generate 12.54 times less return on investment than Banco Macro. But when comparing it to its historical volatility, Banco Bradesco SA is 1.3 times less risky than Banco Macro. It trades about 0.01 of its potential returns per unit of risk. Banco Macro SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,123 in Banco Macro SA on August 27, 2024 and sell it today you would earn a total of 6,968 from holding Banco Macro SA or generate 620.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Banco Macro SA
Performance |
| Timeline |
| Banco Bradesco SA |
| Banco Macro SA |
Banco Bradesco and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Banco Macro
The main advantage of trading using opposite Banco Bradesco and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
| Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. BBVA Banco Frances | Banco Macro vs. Banco Bradesco SA | Banco Macro vs. Itau Unibanco Banco |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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