Correlation Between Banco Bradesco and Intercorp Financial
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Intercorp 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 Intercorp 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 Intercorp Financial Services, you can compare the effects of market volatilities on Banco Bradesco and Intercorp 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 Intercorp Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Intercorp Financial.
Diversification Opportunities for Banco Bradesco and Intercorp Financial
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Intercorp is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Intercorp Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercorp 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 Intercorp Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercorp Financial has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Intercorp Financial go up and down completely randomly.
Pair Corralation between Banco Bradesco and Intercorp Financial
Given the investment horizon of 90 days Banco Bradesco SA is expected to under-perform the Intercorp Financial. In addition to that, Banco Bradesco is 1.81 times more volatile than Intercorp Financial Services. It trades about -0.23 of its total potential returns per unit of risk. Intercorp Financial Services is currently generating about 0.26 per unit of volatility. If you would invest 2,735 in Intercorp Financial Services on August 27, 2024 and sell it today you would earn a total of 152.00 from holding Intercorp Financial Services or generate 5.56% 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. Intercorp Financial Services
Performance |
| Timeline |
| Banco Bradesco SA |
| Intercorp Financial |
Banco Bradesco and Intercorp Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Intercorp Financial
The main advantage of trading using opposite Banco Bradesco and Intercorp Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Intercorp 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 Intercorp Financial will offset losses from the drop in Intercorp 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 |
| Intercorp Financial vs. Banco De Chile | Intercorp Financial vs. Bancolombia SA ADR | Intercorp Financial vs. Foreign Trade Bank | Intercorp Financial vs. BancFirst |
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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