Correlation Between Banco Comercial and Martifer SGPS
Can any of the company-specific risk be diversified away by investing in both Banco Comercial and Martifer SGPS 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 Comercial and Martifer SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Comercial Portugues and Martifer SGPS SA, you can compare the effects of market volatilities on Banco Comercial and Martifer SGPS 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 Comercial with a short position of Martifer SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Comercial and Martifer SGPS.
Diversification Opportunities for Banco Comercial and Martifer SGPS
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and Martifer is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Banco Comercial Portugues and Martifer SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martifer SGPS SA and Banco Comercial 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 Comercial Portugues are associated (or correlated) with Martifer SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martifer SGPS SA has no effect on the direction of Banco Comercial i.e., Banco Comercial and Martifer SGPS go up and down completely randomly.
Pair Corralation between Banco Comercial and Martifer SGPS
Assuming the 90 days trading horizon Banco Comercial Portugues is expected to generate 1.24 times more return on investment than Martifer SGPS. However, Banco Comercial is 1.24 times more volatile than Martifer SGPS SA. It trades about 0.1 of its potential returns per unit of risk. Martifer SGPS SA is currently generating about 0.04 per unit of risk. If you would invest 14.00 in Banco Comercial Portugues on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Banco Comercial Portugues or generate 221.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Comercial Portugues vs. Martifer SGPS SA
Performance |
| Timeline |
| Banco Comercial Portugues |
| Martifer SGPS SA |
Banco Comercial and Martifer SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Comercial and Martifer SGPS
The main advantage of trading using opposite Banco Comercial and Martifer SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Comercial position performs unexpectedly, Martifer SGPS 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 Martifer SGPS will offset losses from the drop in Martifer SGPS's long position.| Banco Comercial vs. Sonae SGPS SA | Banco Comercial vs. Galp Energia SGPS | Banco Comercial vs. EDP Energias | Banco Comercial vs. Altri SGPS SA |
| Martifer SGPS vs. Mota Engil SGPS SA | Martifer SGPS vs. Impresa Sociedade | Martifer SGPS vs. Teixeira Duarte | Martifer SGPS vs. Altri SGPS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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