Correlation Between Banco Hipotecario and Banco Patagonia
Can any of the company-specific risk be diversified away by investing in both Banco Hipotecario and Banco Patagonia 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 Hipotecario and Banco Patagonia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Hipotecario SA and Banco Patagonia, you can compare the effects of market volatilities on Banco Hipotecario and Banco Patagonia 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 Hipotecario with a short position of Banco Patagonia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Hipotecario and Banco Patagonia.
Diversification Opportunities for Banco Hipotecario and Banco Patagonia
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Banco and Banco is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Banco Hipotecario SA and Banco Patagonia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Patagonia and Banco Hipotecario 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 Hipotecario SA are associated (or correlated) with Banco Patagonia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Patagonia has no effect on the direction of Banco Hipotecario i.e., Banco Hipotecario and Banco Patagonia go up and down completely randomly.
Pair Corralation between Banco Hipotecario and Banco Patagonia
Assuming the 90 days trading horizon Banco Hipotecario SA is expected to generate 0.91 times more return on investment than Banco Patagonia. However, Banco Hipotecario SA is 1.1 times less risky than Banco Patagonia. It trades about 0.11 of its potential returns per unit of risk. Banco Patagonia is currently generating about 0.04 per unit of risk. If you would invest 40,500 in Banco Hipotecario SA on November 2, 2024 and sell it today you would earn a total of 14,200 from holding Banco Hipotecario SA or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.04% |
| Values | Daily Returns |
Banco Hipotecario SA vs. Banco Patagonia
Performance |
| Timeline |
| Banco Hipotecario |
| Banco Patagonia |
Banco Hipotecario and Banco Patagonia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Hipotecario and Banco Patagonia
The main advantage of trading using opposite Banco Hipotecario and Banco Patagonia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Hipotecario position performs unexpectedly, Banco Patagonia 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 Patagonia will offset losses from the drop in Banco Patagonia's long position.| Banco Hipotecario vs. Banco Macro SA | Banco Hipotecario vs. Banco Santander Ro | Banco Hipotecario vs. Banco Patagonia | Banco Hipotecario vs. Grupo Supervielle SA |
| Banco Patagonia vs. Banco Macro SA | Banco Patagonia vs. Banco Santander Ro | Banco Patagonia vs. Grupo Supervielle SA | Banco Patagonia vs. Banco Hipotecario 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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