Correlation Between BB Seguridade and Banco ABC
Can any of the company-specific risk be diversified away by investing in both BB Seguridade and Banco ABC 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 BB Seguridade and Banco ABC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Seguridade Participacoes and Banco ABC Brasil, you can compare the effects of market volatilities on BB Seguridade and Banco ABC 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 BB Seguridade with a short position of Banco ABC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Seguridade and Banco ABC.
Diversification Opportunities for BB Seguridade and Banco ABC
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBSE3 and Banco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Banco ABC Brasil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco ABC Brasil and BB Seguridade 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 BB Seguridade Participacoes are associated (or correlated) with Banco ABC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco ABC Brasil has no effect on the direction of BB Seguridade i.e., BB Seguridade and Banco ABC go up and down completely randomly.
Pair Corralation between BB Seguridade and Banco ABC
Assuming the 90 days trading horizon BB Seguridade is expected to generate 1.18 times less return on investment than Banco ABC. But when comparing it to its historical volatility, BB Seguridade Participacoes is 1.48 times less risky than Banco ABC. It trades about 0.05 of its potential returns per unit of risk. Banco ABC Brasil is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,554 in Banco ABC Brasil on November 19, 2024 and sell it today you would earn a total of 469.00 from holding Banco ABC Brasil or generate 30.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Seguridade Participacoes vs. Banco ABC Brasil
Performance |
| Timeline |
| BB Seguridade Partic |
| Banco ABC Brasil |
BB Seguridade and Banco ABC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Seguridade and Banco ABC
The main advantage of trading using opposite BB Seguridade and Banco ABC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Seguridade position performs unexpectedly, Banco ABC 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 ABC will offset losses from the drop in Banco ABC's long position.| BB Seguridade vs. Transmissora Aliana de | BB Seguridade vs. Banco do Brasil | BB Seguridade vs. Itasa Investimentos | BB Seguridade vs. Engie Brasil Energia |
| Banco ABC vs. Banco do Estado | Banco ABC vs. MAHLE Metal Leve | Banco ABC vs. Tupy SA | Banco ABC vs. BB Seguridade Participacoes |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |