Correlation Between Banco De and Anfield Resources
Can any of the company-specific risk be diversified away by investing in both Banco De and Anfield Resources 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 De and Anfield Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco De Chile and Anfield Resources, you can compare the effects of market volatilities on Banco De and Anfield Resources 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 De with a short position of Anfield Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Anfield Resources.
Diversification Opportunities for Banco De and Anfield Resources
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Anfield is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile and Anfield Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Resources and Banco De 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 De Chile are associated (or correlated) with Anfield Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Resources has no effect on the direction of Banco De i.e., Banco De and Anfield Resources go up and down completely randomly.
Pair Corralation between Banco De and Anfield Resources
Considering the 90-day investment horizon Banco De Chile is expected to under-perform the Anfield Resources. But the stock apears to be less risky and, when comparing its historical volatility, Banco De Chile is 5.91 times less risky than Anfield Resources. The stock trades about -0.33 of its potential returns per unit of risk. The Anfield Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Anfield Resources on August 25, 2024 and sell it today you would earn a total of 0.50 from holding Anfield Resources or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco De Chile vs. Anfield Resources
Performance |
| Timeline |
| Banco De Chile |
| Anfield Resources |
Banco De and Anfield Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Anfield Resources
The main advantage of trading using opposite Banco De and Anfield Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Anfield Resources 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 Anfield Resources will offset losses from the drop in Anfield Resources' long position.| Banco De vs. Banco Santander Brasil | Banco De vs. CrossFirst Bankshares | Banco De vs. Banco Bradesco SA | Banco De vs. CF Bankshares |
| Anfield Resources vs. Petroleo Brasileiro Petrobras | Anfield Resources vs. Equinor ASA ADR | Anfield Resources vs. Eni SpA ADR | Anfield Resources vs. YPF Sociedad Anonima |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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