Correlation Between Banco De and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Banco De and Banco Macro 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 Banco Macro 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 Banco Macro SA, you can compare the effects of market volatilities on Banco De and Banco Macro 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 Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Banco Macro.
Diversification Opportunities for Banco De and Banco Macro
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Banco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA 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 Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Banco De i.e., Banco De and Banco Macro go up and down completely randomly.
Pair Corralation between Banco De and Banco Macro
Considering the 90-day investment horizon Banco De Chile is expected to generate 0.3 times more return on investment than Banco Macro. However, Banco De Chile is 3.37 times less risky than Banco Macro. It trades about 0.35 of its potential returns per unit of risk. Banco Macro SA is currently generating about -0.3 per unit of risk. If you would invest 2,424 in Banco De Chile on November 30, 2024 and sell it today you would earn a total of 196.00 from holding Banco De Chile or generate 8.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Banco De Chile vs. Banco Macro SA
Performance |
Timeline |
Banco De Chile |
Banco Macro SA |
Banco De and Banco Macro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco De and Banco Macro
The main advantage of trading using opposite Banco De and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Banco Macro 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 Macro will offset losses from the drop in Banco Macro's long position.Banco De vs. Banco Santander Brasil | ||
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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