Correlation Between Banco Comercial and NOS SGPS
Can any of the company-specific risk be diversified away by investing in both Banco Comercial and NOS 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 NOS 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 NOS SGPS SA, you can compare the effects of market volatilities on Banco Comercial and NOS 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 NOS SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Comercial and NOS SGPS.
Diversification Opportunities for Banco Comercial and NOS SGPS
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and NOS is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Banco Comercial Portugues and NOS SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOS 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 NOS SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOS SGPS SA has no effect on the direction of Banco Comercial i.e., Banco Comercial and NOS SGPS go up and down completely randomly.
Pair Corralation between Banco Comercial and NOS SGPS
Assuming the 90 days trading horizon Banco Comercial Portugues is expected to generate 1.69 times more return on investment than NOS SGPS. However, Banco Comercial is 1.69 times more volatile than NOS SGPS SA. It trades about 0.14 of its potential returns per unit of risk. NOS SGPS SA is currently generating about -0.1 per unit of risk. If you would invest 42.00 in Banco Comercial Portugues on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Banco Comercial Portugues or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Comercial Portugues vs. NOS SGPS SA
Performance |
| Timeline |
| Banco Comercial Portugues |
| NOS SGPS SA |
Banco Comercial and NOS SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Comercial and NOS SGPS
The main advantage of trading using opposite Banco Comercial and NOS SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Comercial position performs unexpectedly, NOS 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 NOS SGPS will offset losses from the drop in NOS SGPS's long position.| Banco Comercial vs. Sonae SGPS SA | Banco Comercial vs. Galp Energia SGPS | Banco Comercial vs. EDP Energias | Banco Comercial vs. CTT Correios de |
| NOS SGPS vs. Futebol Clube do | NOS SGPS vs. Sporting Clube de | NOS SGPS vs. Martifer SGPS SA | NOS SGPS vs. Corticeira Amorim |
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..
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |