Correlation Between Eastern Bankshares and Banco De
Can any of the company-specific risk be diversified away by investing in both Eastern Bankshares and Banco De 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 Eastern Bankshares and Banco De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Bankshares and Banco De Chile, you can compare the effects of market volatilities on Eastern Bankshares and Banco De 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 Eastern Bankshares with a short position of Banco De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Bankshares and Banco De.
Diversification Opportunities for Eastern Bankshares and Banco De
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastern and Banco is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Bankshares and Banco De Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco De Chile and Eastern Bankshares 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 Eastern Bankshares are associated (or correlated) with Banco De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco De Chile has no effect on the direction of Eastern Bankshares i.e., Eastern Bankshares and Banco De go up and down completely randomly.
Pair Corralation between Eastern Bankshares and Banco De
Considering the 90-day investment horizon Eastern Bankshares is expected to generate 1.69 times more return on investment than Banco De. However, Eastern Bankshares is 1.69 times more volatile than Banco De Chile. It trades about 0.03 of its potential returns per unit of risk. Banco De Chile is currently generating about 0.04 per unit of risk. If you would invest 1,501 in Eastern Bankshares on September 1, 2024 and sell it today you would earn a total of 363.00 from holding Eastern Bankshares or generate 24.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Bankshares vs. Banco De Chile
Performance |
| Timeline |
| Eastern Bankshares |
| Banco De Chile |
Eastern Bankshares and Banco De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Bankshares and Banco De
The main advantage of trading using opposite Eastern Bankshares and Banco De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Bankshares position performs unexpectedly, Banco De 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 De will offset losses from the drop in Banco De's long position.| Eastern Bankshares vs. Western New England | Eastern Bankshares vs. Northeast Community Bancorp | Eastern Bankshares vs. Independent Bank | Eastern Bankshares vs. The First Bancshares, |
| Banco De vs. Banco Santander Brasil | Banco De vs. CrossFirst Bankshares | Banco De vs. Banco Bradesco SA | Banco De 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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