Correlation Between Banestes and Banco Alfa
Can any of the company-specific risk be diversified away by investing in both Banestes and Banco Alfa 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 Banestes and Banco Alfa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banestes SA and Banco Alfa de, you can compare the effects of market volatilities on Banestes and Banco Alfa 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 Banestes with a short position of Banco Alfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banestes and Banco Alfa.
Diversification Opportunities for Banestes and Banco Alfa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banestes and Banco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banestes SA and Banco Alfa de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Alfa de and Banestes 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 Banestes SA are associated (or correlated) with Banco Alfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Alfa de has no effect on the direction of Banestes i.e., Banestes and Banco Alfa go up and down completely randomly.
Pair Corralation between Banestes and Banco Alfa
Assuming the 90 days trading horizon Banestes SA is expected to generate 0.88 times more return on investment than Banco Alfa. However, Banestes SA is 1.14 times less risky than Banco Alfa. It trades about 0.08 of its potential returns per unit of risk. Banco Alfa de is currently generating about 0.05 per unit of risk. If you would invest 553.00 in Banestes SA on August 24, 2024 and sell it today you would earn a total of 279.00 from holding Banestes SA or generate 50.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Banestes SA vs. Banco Alfa de
Performance |
| Timeline |
| Banestes SA |
| Banco Alfa de |
Banestes and Banco Alfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banestes and Banco Alfa
The main advantage of trading using opposite Banestes and Banco Alfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banestes position performs unexpectedly, Banco Alfa 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 Banco Alfa will offset losses from the drop in Banco Alfa's long position.| Banestes vs. Banestes SA | Banestes vs. Banco da Amaznia | Banestes vs. Banco ABC Brasil | Banestes vs. Banco do Estado |
| Banco Alfa vs. Banco Santander SA | Banco Alfa vs. Banco do Estado | Banco Alfa vs. Banco do Estado | Banco Alfa vs. Banco da Amaznia |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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