Correlation Between Banco De and Finwise Bancorp
Can any of the company-specific risk be diversified away by investing in both Banco De and Finwise Bancorp 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 Finwise Bancorp 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 Finwise Bancorp, you can compare the effects of market volatilities on Banco De and Finwise Bancorp 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 Finwise Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Finwise Bancorp.
Diversification Opportunities for Banco De and Finwise Bancorp
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and Finwise is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile and Finwise Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finwise Bancorp 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 Finwise Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finwise Bancorp has no effect on the direction of Banco De i.e., Banco De and Finwise Bancorp go up and down completely randomly.
Pair Corralation between Banco De and Finwise Bancorp
Considering the 90-day investment horizon Banco De Chile is expected to under-perform the Finwise Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Banco De Chile is 2.17 times less risky than Finwise Bancorp. The stock trades about -0.01 of its potential returns per unit of risk. The Finwise Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,606 in Finwise Bancorp on October 25, 2024 and sell it today you would earn a total of 57.00 from holding Finwise Bancorp or generate 3.55% 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. Finwise Bancorp
Performance |
| Timeline |
| Banco De Chile |
| Finwise Bancorp |
Banco De and Finwise Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Finwise Bancorp
The main advantage of trading using opposite Banco De and Finwise Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Finwise Bancorp 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 Finwise Bancorp will offset losses from the drop in Finwise Bancorp's long position.| Banco De vs. Banco Santander Brasil | Banco De vs. CrossFirst Bankshares | Banco De vs. Banco Bradesco SA | Banco De vs. CF Bankshares |
| Finwise Bancorp vs. Home Federal Bancorp | Finwise Bancorp vs. First Financial Northwest | Finwise Bancorp vs. First Northwest Bancorp | Finwise Bancorp vs. First Capital |
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.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |