Correlation Between Bancolombia and Entera Bio
Can any of the company-specific risk be diversified away by investing in both Bancolombia and Entera Bio 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 Entera Bio 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 Entera Bio, you can compare the effects of market volatilities on Bancolombia and Entera Bio 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 Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancolombia and Entera Bio.
Diversification Opportunities for Bancolombia and Entera Bio
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bancolombia and Entera is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bancolombia SA ADR and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio 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 Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of Bancolombia i.e., Bancolombia and Entera Bio go up and down completely randomly.
Pair Corralation between Bancolombia and Entera Bio
If you would invest 3,160 in Bancolombia SA ADR on August 28, 2024 and sell it today you would earn a total of 98.00 from holding Bancolombia SA ADR or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bancolombia SA ADR vs. Entera Bio
Performance |
| Timeline |
| Bancolombia SA ADR |
| Entera Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bancolombia and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancolombia and Entera Bio
The main advantage of trading using opposite Bancolombia and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancolombia position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| Bancolombia vs. Banco Santander Brasil | Bancolombia vs. CrossFirst Bankshares | Bancolombia vs. Banco Bradesco SA | Bancolombia vs. CF Bankshares |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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