Correlation Between Financeira Alfa and Banco Da
Can any of the company-specific risk be diversified away by investing in both Financeira Alfa and Banco Da 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 Financeira Alfa and Banco Da into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financeira Alfa SA and Banco da Amaznia, you can compare the effects of market volatilities on Financeira Alfa and Banco Da 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 Financeira Alfa with a short position of Banco Da. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financeira Alfa and Banco Da.
Diversification Opportunities for Financeira Alfa and Banco Da
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Financeira and Banco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Financeira Alfa SA and Banco da Amaznia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco da Amaznia and Financeira 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 Financeira Alfa SA are associated (or correlated) with Banco Da. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco da Amaznia has no effect on the direction of Financeira Alfa i.e., Financeira Alfa and Banco Da go up and down completely randomly.
Pair Corralation between Financeira Alfa and Banco Da
Assuming the 90 days trading horizon Financeira Alfa SA is expected to generate 0.73 times more return on investment than Banco Da. However, Financeira Alfa SA is 1.37 times less risky than Banco Da. It trades about 0.06 of its potential returns per unit of risk. Banco da Amaznia is currently generating about 0.04 per unit of risk. If you would invest 590.00 in Financeira Alfa SA on August 29, 2024 and sell it today you would earn a total of 108.00 from holding Financeira Alfa SA or generate 18.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Financeira Alfa SA vs. Banco da Amaznia
Performance |
| Timeline |
| Financeira Alfa SA |
| Banco da Amaznia |
Financeira Alfa and Banco Da Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financeira Alfa and Banco Da
The main advantage of trading using opposite Financeira Alfa and Banco Da positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financeira Alfa position performs unexpectedly, Banco Da 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 Banco Da will offset losses from the drop in Banco Da's long position.| Financeira Alfa vs. Financeira Alfa SA | Financeira Alfa vs. Banco Alfa de | Financeira Alfa vs. Banco Alfa de | Financeira Alfa vs. Banco da Amaznia |
| Banco Da vs. Banestes SA | Banco Da vs. Banco Mercantil do | Banco Da vs. Banco do Nordeste | Banco Da vs. Banco do Estado |
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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