Correlation Between Finwise Bancorp and Bancolombia
Can any of the company-specific risk be diversified away by investing in both Finwise Bancorp and Bancolombia 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 Finwise Bancorp and Bancolombia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finwise Bancorp and Bancolombia SA ADR, you can compare the effects of market volatilities on Finwise Bancorp and Bancolombia 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 Finwise Bancorp with a short position of Bancolombia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finwise Bancorp and Bancolombia.
Diversification Opportunities for Finwise Bancorp and Bancolombia
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Finwise and Bancolombia is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Finwise Bancorp and Bancolombia SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancolombia SA ADR and Finwise Bancorp 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 Finwise Bancorp are associated (or correlated) with Bancolombia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancolombia SA ADR has no effect on the direction of Finwise Bancorp i.e., Finwise Bancorp and Bancolombia go up and down completely randomly.
Pair Corralation between Finwise Bancorp and Bancolombia
Given the investment horizon of 90 days Finwise Bancorp is expected to generate 2.38 times less return on investment than Bancolombia. In addition to that, Finwise Bancorp is 1.72 times more volatile than Bancolombia SA ADR. It trades about 0.04 of its total potential returns per unit of risk. Bancolombia SA ADR is currently generating about 0.15 per unit of volatility. If you would invest 3,052 in Bancolombia SA ADR on October 25, 2024 and sell it today you would earn a total of 391.00 from holding Bancolombia SA ADR or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finwise Bancorp vs. Bancolombia SA ADR
Performance |
| Timeline |
| Finwise Bancorp |
| Bancolombia SA ADR |
Finwise Bancorp and Bancolombia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finwise Bancorp and Bancolombia
The main advantage of trading using opposite Finwise Bancorp and Bancolombia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finwise Bancorp position performs unexpectedly, Bancolombia 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 Bancolombia will offset losses from the drop in Bancolombia's long position.| Finwise Bancorp vs. Home Federal Bancorp | Finwise Bancorp vs. First Financial Northwest | Finwise Bancorp vs. First Northwest Bancorp | Finwise Bancorp vs. First Capital |
| Bancolombia vs. Banco De Chile | Bancolombia vs. Banco Bradesco SA | Bancolombia vs. Banco Santander Chile | Bancolombia vs. Intercorp Financial Services |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |