Correlation Between Banco De and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both Banco De and CF 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 CF 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 CF Bankshares, you can compare the effects of market volatilities on Banco De and CF 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 CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and CF Bankshares.
Diversification Opportunities for Banco De and CF Bankshares
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and CFBK is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF 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 CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of Banco De i.e., Banco De and CF Bankshares go up and down completely randomly.
Pair Corralation between Banco De and CF Bankshares
Considering the 90-day investment horizon Banco De Chile is expected to generate 0.35 times more return on investment than CF Bankshares. However, Banco De Chile is 2.88 times less risky than CF Bankshares. It trades about 0.18 of its potential returns per unit of risk. CF Bankshares is currently generating about -0.12 per unit of risk. If you would invest 2,271 in Banco De Chile on October 20, 2024 and sell it today you would earn a total of 79.00 from holding Banco De Chile or generate 3.48% 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. CF Bankshares
Performance |
| Timeline |
| Banco De Chile |
| CF Bankshares |
Banco De and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and CF Bankshares
The main advantage of trading using opposite Banco De and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, CF 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 CF Bankshares will offset losses from the drop in CF 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 |
| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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