Correlation Between First Hawaiian and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and Itau Unibanco 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 First Hawaiian and Itau Unibanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and Itau Unibanco Banco, you can compare the effects of market volatilities on First Hawaiian and Itau Unibanco 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 First Hawaiian with a short position of Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and Itau Unibanco.
Diversification Opportunities for First Hawaiian and Itau Unibanco
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Itau is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco and First Hawaiian 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 First Hawaiian are associated (or correlated) with Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of First Hawaiian i.e., First Hawaiian and Itau Unibanco go up and down completely randomly.
Pair Corralation between First Hawaiian and Itau Unibanco
Considering the 90-day investment horizon First Hawaiian is expected to generate 5.76 times less return on investment than Itau Unibanco. But when comparing it to its historical volatility, First Hawaiian is 1.56 times less risky than Itau Unibanco. It trades about 0.08 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 498.00 in Itau Unibanco Banco on October 28, 2024 and sell it today you would earn a total of 49.00 from holding Itau Unibanco Banco or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Hawaiian vs. Itau Unibanco Banco
Performance |
| Timeline |
| First Hawaiian |
| Itau Unibanco Banco |
First Hawaiian and Itau Unibanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and Itau Unibanco
The main advantage of trading using opposite First Hawaiian and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco's long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |