Correlation Between Banco Macro and Zions Bancorporation
Can any of the company-specific risk be diversified away by investing in both Banco Macro and Zions Bancorporation 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 Macro and Zions Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Macro SA and Zions Bancorporation, you can compare the effects of market volatilities on Banco Macro and Zions Bancorporation 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 Macro with a short position of Zions Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and Zions Bancorporation.
Diversification Opportunities for Banco Macro and Zions Bancorporation
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Zions is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and Zions Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation and Banco Macro 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 Macro SA are associated (or correlated) with Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Banco Macro i.e., Banco Macro and Zions Bancorporation go up and down completely randomly.
Pair Corralation between Banco Macro and Zions Bancorporation
Considering the 90-day investment horizon Banco Macro SA is expected to generate 1.08 times more return on investment than Zions Bancorporation. However, Banco Macro is 1.08 times more volatile than Zions Bancorporation. It trades about 0.13 of its potential returns per unit of risk. Zions Bancorporation is currently generating about 0.04 per unit of risk. If you would invest 1,096 in Banco Macro SA on August 30, 2024 and sell it today you would earn a total of 7,108 from holding Banco Macro SA or generate 648.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Macro SA vs. Zions Bancorp.
Performance |
| Timeline |
| Banco Macro SA |
| Zions Bancorporation |
Banco Macro and Zions Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Macro and Zions Bancorporation
The main advantage of trading using opposite Banco Macro and Zions Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, Zions Bancorporation 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 Zions Bancorporation will offset losses from the drop in Zions Bancorporation's long position.| Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. BBVA Banco Frances | Banco Macro vs. Banco Bradesco SA | Banco Macro vs. Itau Unibanco Banco |
| Zions Bancorporation vs. KeyCorp | Zions Bancorporation vs. Comerica | Zions Bancorporation vs. First Horizon National | Zions Bancorporation vs. Western Alliance Bancorporation |
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 Stocks Directory module to find actively traded stocks across global markets.
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