Correlation Between Banco Bradesco and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and CF Bankshares 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 CF Bankshares 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 CF Bankshares, you can compare the effects of market volatilities on Banco Bradesco and CF Bankshares 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 CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and CF Bankshares.
Diversification Opportunities for Banco Bradesco and CF Bankshares
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and CFBK is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares 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 CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and CF Bankshares go up and down completely randomly.
Pair Corralation between Banco Bradesco and CF Bankshares
Given the investment horizon of 90 days Banco Bradesco SA is expected to generate 1.01 times more return on investment than CF Bankshares. However, Banco Bradesco is 1.01 times more volatile than CF Bankshares. It trades about 0.14 of its potential returns per unit of risk. CF Bankshares is currently generating about -0.15 per unit of risk. If you would invest 186.00 in Banco Bradesco SA on January 12, 2025 and sell it today you would earn a total of 13.00 from holding Banco Bradesco SA or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. CF Bankshares
Performance |
| Timeline |
| Banco Bradesco SA |
| CF Bankshares |
Banco Bradesco and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and CF Bankshares
The main advantage of trading using opposite Banco Bradesco and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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