Correlation Between Banco Do and Baumer SA
Can any of the company-specific risk be diversified away by investing in both Banco Do and Baumer SA 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 Do and Baumer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco do Estado and Baumer SA, you can compare the effects of market volatilities on Banco Do and Baumer SA 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 Do with a short position of Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Do and Baumer SA.
Diversification Opportunities for Banco Do and Baumer SA
Very good diversification
The 3 months correlation between Banco and Baumer is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Banco do Estado and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA and Banco Do 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 do Estado are associated (or correlated) with Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Banco Do i.e., Banco Do and Baumer SA go up and down completely randomly.
Pair Corralation between Banco Do and Baumer SA
Assuming the 90 days trading horizon Banco do Estado is expected to under-perform the Baumer SA. In addition to that, Banco Do is 1.12 times more volatile than Baumer SA. It trades about -0.01 of its total potential returns per unit of risk. Baumer SA is currently generating about 0.14 per unit of volatility. If you would invest 1,030 in Baumer SA on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Baumer SA or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco do Estado vs. Baumer SA
Performance |
| Timeline |
| Banco do Estado |
| Baumer SA |
Banco Do and Baumer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Do and Baumer SA
The main advantage of trading using opposite Banco Do and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Do position performs unexpectedly, Baumer SA 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 Baumer SA will offset losses from the drop in Baumer SA's long position.| Banco Do vs. Micron Technology | Banco Do vs. Zoom Video Communications | Banco Do vs. The Trade Desk | Banco Do vs. Technos SA |
| Baumer SA vs. Baumer SA | Baumer SA vs. Biomm SA | Baumer SA vs. Bardella SA Indstrias | Baumer SA vs. Banco Alfa de |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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