Correlation Between Itau Unibanco and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco and Finward Bancorp 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 Finward Bancorp 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 Finward Bancorp, you can compare the effects of market volatilities on Itau Unibanco and Finward Bancorp 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 Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and Finward Bancorp.
Diversification Opportunities for Itau Unibanco and Finward Bancorp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Itau and Finward is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp 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 Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of Itau Unibanco i.e., Itau Unibanco and Finward Bancorp go up and down completely randomly.
Pair Corralation between Itau Unibanco and Finward Bancorp
Given the investment horizon of 90 days Itau Unibanco Banco is expected to under-perform the Finward Bancorp. In addition to that, Itau Unibanco is 1.02 times more volatile than Finward Bancorp. It trades about -0.01 of its total potential returns per unit of risk. Finward Bancorp is currently generating about 0.13 per unit of volatility. If you would invest 2,439 in Finward Bancorp on August 30, 2024 and sell it today you would earn a total of 652.00 from holding Finward Bancorp or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itau Unibanco Banco vs. Finward Bancorp
Performance |
| Timeline |
| Itau Unibanco Banco |
| Finward Bancorp |
Itau Unibanco and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Unibanco and Finward Bancorp
The main advantage of trading using opposite Itau Unibanco and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco position performs unexpectedly, Finward Bancorp 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 Finward Bancorp will offset losses from the drop in Finward Bancorp's long position.| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking Group |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal Bancorp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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