Correlation Between Bancolombia and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both Bancolombia and Berkshire Hills 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 Bancolombia and Berkshire Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancolombia SA ADR and Berkshire Hills Bancorp, you can compare the effects of market volatilities on Bancolombia and Berkshire Hills 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 Bancolombia with a short position of Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancolombia and Berkshire Hills.
Diversification Opportunities for Bancolombia and Berkshire Hills
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bancolombia and Berkshire is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bancolombia SA ADR and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp and Bancolombia 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 Bancolombia SA ADR are associated (or correlated) with Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of Bancolombia i.e., Bancolombia and Berkshire Hills go up and down completely randomly.
Pair Corralation between Bancolombia and Berkshire Hills
Considering the 90-day investment horizon Bancolombia SA ADR is expected to under-perform the Berkshire Hills. But the stock apears to be less risky and, when comparing its historical volatility, Bancolombia SA ADR is 1.28 times less risky than Berkshire Hills. The stock trades about -0.01 of its potential returns per unit of risk. The Berkshire Hills Bancorp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,128 in Berkshire Hills Bancorp on September 1, 2024 and sell it today you would earn a total of 920.00 from holding Berkshire Hills Bancorp or generate 43.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bancolombia SA ADR vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| Bancolombia SA ADR |
| Berkshire Hills Bancorp |
Bancolombia and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancolombia and Berkshire Hills
The main advantage of trading using opposite Bancolombia and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancolombia position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' long position.| Bancolombia vs. Banco De Chile | Bancolombia vs. Banco Bradesco SA | Bancolombia vs. Banco Santander Chile | Bancolombia vs. Intercorp Financial Services |
| Berkshire Hills vs. Finward Bancorp | Berkshire Hills vs. Community West Bancshares | Berkshire Hills vs. First Community | Berkshire Hills vs. First Capital |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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