Correlation Between Banco Alfa and Bahema Educao
Can any of the company-specific risk be diversified away by investing in both Banco Alfa and Bahema Educao 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 Alfa and Bahema Educao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Alfa de and Bahema Educao SA, you can compare the effects of market volatilities on Banco Alfa and Bahema Educao 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 Alfa with a short position of Bahema Educao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Alfa and Bahema Educao.
Diversification Opportunities for Banco Alfa and Bahema Educao
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Bahema is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banco Alfa de and Bahema Educao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bahema Educao SA and Banco Alfa 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 Alfa de are associated (or correlated) with Bahema Educao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bahema Educao SA has no effect on the direction of Banco Alfa i.e., Banco Alfa and Bahema Educao go up and down completely randomly.
Pair Corralation between Banco Alfa and Bahema Educao
Assuming the 90 days trading horizon Banco Alfa de is expected to generate 0.29 times more return on investment than Bahema Educao. However, Banco Alfa de is 3.4 times less risky than Bahema Educao. It trades about 0.05 of its potential returns per unit of risk. Bahema Educao SA is currently generating about -0.02 per unit of risk. If you would invest 1,004 in Banco Alfa de on August 31, 2024 and sell it today you would earn a total of 250.00 from holding Banco Alfa de or generate 24.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Banco Alfa de vs. Bahema Educao SA
Performance |
| Timeline |
| Banco Alfa de |
| Bahema Educao SA |
Banco Alfa and Bahema Educao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Alfa and Bahema Educao
The main advantage of trading using opposite Banco Alfa and Bahema Educao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Alfa position performs unexpectedly, Bahema Educao 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 Bahema Educao will offset losses from the drop in Bahema Educao's long position.| Banco Alfa vs. Banco do Brasil | Banco Alfa vs. Banco Bradesco SA | Banco Alfa vs. Ita Unibanco Holding | Banco Alfa vs. Petrleo Brasileiro SA |
| Bahema Educao vs. Banco Bradesco SA | Bahema Educao vs. Petrleo Brasileiro SA | Bahema Educao vs. Ita Unibanco Holding | Bahema Educao vs. Itasa Investimentos |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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