Correlation Between Banco Bradesco and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Cincinnati Financial 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 Cincinnati Financial 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 Cincinnati Financial, you can compare the effects of market volatilities on Banco Bradesco and Cincinnati Financial 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 Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Cincinnati Financial.
Diversification Opportunities for Banco Bradesco and Cincinnati Financial
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Cincinnati is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial 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 Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Banco Bradesco and Cincinnati Financial
Given the investment horizon of 90 days Banco Bradesco SA is expected to generate 1.98 times more return on investment than Cincinnati Financial. However, Banco Bradesco is 1.98 times more volatile than Cincinnati Financial. It trades about -0.06 of its potential returns per unit of risk. Cincinnati Financial is currently generating about -0.28 per unit of risk. If you would invest 188.00 in Banco Bradesco SA on October 9, 2024 and sell it today you would lose (7.00) from holding Banco Bradesco SA or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Cincinnati Financial
Performance |
| Timeline |
| Banco Bradesco SA |
| Cincinnati Financial |
Banco Bradesco and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Cincinnati Financial
The main advantage of trading using opposite Banco Bradesco and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial's long position.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |