Correlation Between Banco Bradesco and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and KeyCorp 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 KeyCorp 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 KeyCorp, you can compare the effects of market volatilities on Banco Bradesco and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and KeyCorp.
Diversification Opportunities for Banco Bradesco and KeyCorp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and KeyCorp is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and KeyCorp go up and down completely randomly.
Pair Corralation between Banco Bradesco and KeyCorp
Given the investment horizon of 90 days Banco Bradesco SA is expected to under-perform the KeyCorp. In addition to that, Banco Bradesco is 2.06 times more volatile than KeyCorp. It trades about -0.02 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.08 per unit of volatility. If you would invest 2,024 in KeyCorp on August 24, 2024 and sell it today you would earn a total of 476.00 from holding KeyCorp or generate 23.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Banco Bradesco SA vs. KeyCorp
Performance |
| Timeline |
| Banco Bradesco SA |
| KeyCorp |
Banco Bradesco and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and KeyCorp
The main advantage of trading using opposite Banco Bradesco and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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