Correlation Between Blumar and Banco De
Can any of the company-specific risk be diversified away by investing in both Blumar and Banco De 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 Blumar and Banco De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blumar and Banco de Credito, you can compare the effects of market volatilities on Blumar and Banco De 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 Blumar with a short position of Banco De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blumar and Banco De.
Diversification Opportunities for Blumar and Banco De
Very good diversification
The 3 months correlation between Blumar and Banco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Blumar and Banco de Credito in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco de Credito and Blumar 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 Blumar are associated (or correlated) with Banco De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco de Credito has no effect on the direction of Blumar i.e., Blumar and Banco De go up and down completely randomly.
Pair Corralation between Blumar and Banco De
Assuming the 90 days trading horizon Blumar is expected to under-perform the Banco De. But the stock apears to be less risky and, when comparing its historical volatility, Blumar is 2.01 times less risky than Banco De. The stock trades about -0.25 of its potential returns per unit of risk. The Banco de Credito is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,705,000 in Banco de Credito on September 3, 2024 and sell it today you would earn a total of 72,000 from holding Banco de Credito or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.69% |
| Values | Daily Returns |
Blumar vs. Banco de Credito
Performance |
| Timeline |
| Blumar |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Banco de Credito |
Blumar and Banco De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blumar and Banco De
The main advantage of trading using opposite Blumar and Banco De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blumar position performs unexpectedly, Banco De 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 De will offset losses from the drop in Banco De's long position.The idea behind Blumar and Banco de Credito pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Banco De vs. Banco Santander Chile | Banco De vs. Banco de Chile | Banco De vs. Falabella | Banco De vs. Empresas Copec 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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