Correlation Between Banco De and Compania
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By analyzing existing cross correlation between Banco de Credito and Compania de Minas, you can compare the effects of market volatilities on Banco De and Compania 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 De with a short position of Compania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Compania.
Diversification Opportunities for Banco De and Compania
Excellent diversification
The 3 months correlation between Banco and Compania is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Banco de Credito and Compania de Minas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Minas and Banco De 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 de Credito are associated (or correlated) with Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Minas has no effect on the direction of Banco De i.e., Banco De and Compania go up and down completely randomly.
Pair Corralation between Banco De and Compania
Assuming the 90 days trading horizon Banco De is expected to generate 1.49 times less return on investment than Compania. But when comparing it to its historical volatility, Banco de Credito is 1.51 times less risky than Compania. It trades about 0.07 of its potential returns per unit of risk. Compania de Minas is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 730.00 in Compania de Minas on August 31, 2024 and sell it today you would earn a total of 517.00 from holding Compania de Minas or generate 70.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Banco de Credito vs. Compania de Minas
Performance |
| Timeline |
| Banco de Credito |
| Compania de Minas |
Banco De and Compania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Compania
The main advantage of trading using opposite Banco De and Compania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Compania 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 Compania will offset losses from the drop in Compania's long position.The idea behind Banco de Credito and Compania de Minas pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Compania vs. Corporacion Aceros Arequipa | Compania vs. Nexa Resources Peru | Compania vs. Citigroup | Compania vs. Union Andina 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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