Correlation Between Banco Comercial and Teixeira Duarte
Can any of the company-specific risk be diversified away by investing in both Banco Comercial and Teixeira Duarte 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 Teixeira Duarte 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 Teixeira Duarte, you can compare the effects of market volatilities on Banco Comercial and Teixeira Duarte 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 Teixeira Duarte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Comercial and Teixeira Duarte.
Diversification Opportunities for Banco Comercial and Teixeira Duarte
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Teixeira is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banco Comercial Portugues and Teixeira Duarte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teixeira Duarte 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 Teixeira Duarte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teixeira Duarte has no effect on the direction of Banco Comercial i.e., Banco Comercial and Teixeira Duarte go up and down completely randomly.
Pair Corralation between Banco Comercial and Teixeira Duarte
Assuming the 90 days trading horizon Banco Comercial Portugues is expected to under-perform the Teixeira Duarte. In addition to that, Banco Comercial is 1.2 times more volatile than Teixeira Duarte. It trades about -0.05 of its total potential returns per unit of risk. Teixeira Duarte is currently generating about 0.04 per unit of volatility. If you would invest 8.80 in Teixeira Duarte on September 1, 2024 and sell it today you would earn a total of 0.08 from holding Teixeira Duarte or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Banco Comercial Portugues vs. Teixeira Duarte
Performance |
| Timeline |
| Banco Comercial Portugues |
| Teixeira Duarte |
Banco Comercial and Teixeira Duarte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Comercial and Teixeira Duarte
The main advantage of trading using opposite Banco Comercial and Teixeira Duarte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Comercial position performs unexpectedly, Teixeira Duarte 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 Teixeira Duarte will offset losses from the drop in Teixeira Duarte'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 |
| Teixeira Duarte vs. Mota Engil SGPS SA | Teixeira Duarte vs. Martifer SGPS SA | Teixeira Duarte vs. Impresa Sociedade | Teixeira Duarte vs. Sonae 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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