Correlation Between Banco De and Blumar
Can any of the company-specific risk be diversified away by investing in both Banco De and Blumar 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 Blumar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco de Credito and Blumar, you can compare the effects of market volatilities on Banco De and Blumar 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 Blumar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Blumar.
Diversification Opportunities for Banco De and Blumar
Very good diversification
The 3 months correlation between Banco and Blumar is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Banco de Credito and Blumar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blumar 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 Credito are associated (or correlated) with Blumar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blumar has no effect on the direction of Banco De i.e., Banco De and Blumar go up and down completely randomly.
Pair Corralation between Banco De and Blumar
Assuming the 90 days trading horizon Banco de Credito is expected to generate 1.42 times more return on investment than Blumar. However, Banco De is 1.42 times more volatile than Blumar. It trades about 0.06 of its potential returns per unit of risk. Blumar is currently generating about 0.0 per unit of risk. If you would invest 1,924,139 in Banco de Credito on September 3, 2024 and sell it today you would earn a total of 852,861 from holding Banco de Credito or generate 44.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 49.8% |
| Values | Daily Returns |
Banco de Credito vs. Blumar
Performance |
| Timeline |
| Banco de Credito |
| Blumar |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Banco De and Blumar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Blumar
The main advantage of trading using opposite Banco De and Blumar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Blumar 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 Blumar will offset losses from the drop in Blumar's long position.| Banco De vs. Banco Santander Chile | Banco De vs. Banco de Chile | Banco De vs. Falabella | Banco De vs. Empresas Copec SA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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