Correlation Between Banco De and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both Banco De and CrossFirst Bankshares 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 CrossFirst Bankshares 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 CrossFirst Bankshares, you can compare the effects of market volatilities on Banco De and CrossFirst Bankshares 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 CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and CrossFirst Bankshares.
Diversification Opportunities for Banco De and CrossFirst Bankshares
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Banco and CrossFirst is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares 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 CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of Banco De i.e., Banco De and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between Banco De and CrossFirst Bankshares
Considering the 90-day investment horizon Banco De Chile is expected to under-perform the CrossFirst Bankshares. But the stock apears to be less risky and, when comparing its historical volatility, Banco De Chile is 3.33 times less risky than CrossFirst Bankshares. The stock trades about -0.23 of its potential returns per unit of risk. The CrossFirst Bankshares is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,588 in CrossFirst Bankshares on August 24, 2024 and sell it today you would earn a total of 163.00 from holding CrossFirst Bankshares or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Banco De Chile vs. CrossFirst Bankshares
Performance |
| Timeline |
| Banco De Chile |
| CrossFirst Bankshares |
Banco De and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and CrossFirst Bankshares
The main advantage of trading using opposite Banco De and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| Banco De vs. Banco Santander Brasil | Banco De vs. CrossFirst Bankshares | Banco De vs. Banco Bradesco SA | Banco De vs. CF Bankshares |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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