Correlation Between Itau Unibanco and Teb Bancorp
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco and Teb 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 Teb 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 Teb Bancorp, you can compare the effects of market volatilities on Itau Unibanco and Teb 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 Teb Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and Teb Bancorp.
Diversification Opportunities for Itau Unibanco and Teb Bancorp
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Itau and Teb is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and Teb Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teb 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 Teb Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teb Bancorp has no effect on the direction of Itau Unibanco i.e., Itau Unibanco and Teb Bancorp go up and down completely randomly.
Pair Corralation between Itau Unibanco and Teb Bancorp
Given the investment horizon of 90 days Itau Unibanco is expected to generate 1.49 times less return on investment than Teb Bancorp. But when comparing it to its historical volatility, Itau Unibanco Banco is 2.43 times less risky than Teb Bancorp. It trades about 0.04 of its potential returns per unit of risk. Teb Bancorp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 788.00 in Teb Bancorp on September 24, 2024 and sell it today you would earn a total of 10.00 from holding Teb Bancorp or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Itau Unibanco Banco vs. Teb Bancorp
Performance |
| Timeline |
| Itau Unibanco Banco |
| Teb Bancorp |
Itau Unibanco and Teb Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Unibanco and Teb Bancorp
The main advantage of trading using opposite Itau Unibanco and Teb Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco position performs unexpectedly, Teb 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 Teb Bancorp will offset losses from the drop in Teb 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 |
| Teb Bancorp vs. Banco Bradesco SA | Teb Bancorp vs. Itau Unibanco Banco | Teb Bancorp vs. Lloyds Banking Group | Teb Bancorp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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