Correlation Between Itau Unibanco and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco and Bangkok Bank 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 Itau Unibanco and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itau Unibanco Banco and Bangkok Bank Public, you can compare the effects of market volatilities on Itau Unibanco and Bangkok Bank 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 Itau Unibanco with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and Bangkok Bank.
Diversification Opportunities for Itau Unibanco and Bangkok Bank
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Itau and Bangkok is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public and Itau Unibanco 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 Itau Unibanco Banco are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of Itau Unibanco i.e., Itau Unibanco and Bangkok Bank go up and down completely randomly.
Pair Corralation between Itau Unibanco and Bangkok Bank
Given the investment horizon of 90 days Itau Unibanco Banco is expected to under-perform the Bangkok Bank. But the stock apears to be less risky and, when comparing its historical volatility, Itau Unibanco Banco is 1.22 times less risky than Bangkok Bank. The stock trades about -0.26 of its potential returns per unit of risk. The Bangkok Bank Public is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 380.00 in Bangkok Bank Public on September 23, 2024 and sell it today you would lose (8.00) from holding Bangkok Bank Public or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itau Unibanco Banco vs. Bangkok Bank Public
Performance |
| Timeline |
| Itau Unibanco Banco |
| Bangkok Bank Public |
Itau Unibanco and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Unibanco and Bangkok Bank
The main advantage of trading using opposite Itau Unibanco and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco position performs unexpectedly, Bangkok Bank 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 Bangkok Bank will offset losses from the drop in Bangkok Bank's long position.| Itau Unibanco vs. Shinhan Financial Group | Itau Unibanco vs. KB Financial Group | Itau Unibanco vs. Banco De Chile | Itau Unibanco vs. Orix Corp Ads |
| Bangkok Bank vs. Banco Bradesco SA | Bangkok Bank vs. Itau Unibanco Banco | Bangkok Bank vs. Lloyds Banking Group | Bangkok Bank vs. Deutsche Bank AG |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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