Correlation Between Grupo Financiero and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero and Banco Bradesco 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 Grupo Financiero and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Financiero Galicia and Banco Bradesco SA, you can compare the effects of market volatilities on Grupo Financiero and Banco Bradesco 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 Grupo Financiero with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Banco Bradesco.
Diversification Opportunities for Grupo Financiero and Banco Bradesco
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and Banco is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia and Banco Bradesco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bradesco SA and Grupo Financiero 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 Grupo Financiero Galicia are associated (or correlated) with Banco Bradesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bradesco SA has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Banco Bradesco go up and down completely randomly.
Pair Corralation between Grupo Financiero and Banco Bradesco
Given the investment horizon of 90 days Grupo Financiero Galicia is expected to generate 1.71 times more return on investment than Banco Bradesco. However, Grupo Financiero is 1.71 times more volatile than Banco Bradesco SA. It trades about 0.21 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about -0.26 per unit of risk. If you would invest 4,977 in Grupo Financiero Galicia on August 24, 2024 and sell it today you would earn a total of 616.00 from holding Grupo Financiero Galicia or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Banco Bradesco SA
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Banco Bradesco SA |
Grupo Financiero and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Banco Bradesco
The main advantage of trading using opposite Grupo Financiero and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero position performs unexpectedly, Banco Bradesco 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 Bradesco will offset losses from the drop in Banco Bradesco's long position.| Grupo Financiero vs. Grupo Supervielle SA | Grupo Financiero vs. BBVA Banco Frances | Grupo Financiero vs. Itau Unibanco Banco | Grupo Financiero vs. Banco Bradesco SA |
| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Banco Macro SA | Banco Bradesco vs. Lloyds Banking Group | Banco Bradesco vs. Grupo Financiero Galicia |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |