Correlation Between Banco De and Great Elm
Can any of the company-specific risk be diversified away by investing in both Banco De and Great Elm 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 Great Elm 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 Great Elm Capital, you can compare the effects of market volatilities on Banco De and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Great Elm.
Diversification Opportunities for Banco De and Great Elm
Pay attention - limited upside
The 3 months correlation between Banco and Great is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Banco De i.e., Banco De and Great Elm go up and down completely randomly.
Pair Corralation between Banco De and Great Elm
Considering the 90-day investment horizon Banco De Chile is expected to generate 2.47 times more return on investment than Great Elm. However, Banco De is 2.47 times more volatile than Great Elm Capital. It trades about 0.06 of its potential returns per unit of risk. Great Elm Capital is currently generating about 0.06 per unit of risk. If you would invest 1,604 in Banco De Chile on August 30, 2024 and sell it today you would earn a total of 681.00 from holding Banco De Chile or generate 42.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Banco De Chile vs. Great Elm Capital
Performance |
| Timeline |
| Banco De Chile |
| Great Elm Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Banco De and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Great Elm
The main advantage of trading using opposite Banco De and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm'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 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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