Correlation Between Itau Unibanco and Territorial Bancorp
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco and Territorial 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 Territorial 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 Territorial Bancorp, you can compare the effects of market volatilities on Itau Unibanco and Territorial 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 Territorial Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and Territorial Bancorp.
Diversification Opportunities for Itau Unibanco and Territorial Bancorp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Itau and Territorial is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and Territorial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Territorial 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 Territorial Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Territorial Bancorp has no effect on the direction of Itau Unibanco i.e., Itau Unibanco and Territorial Bancorp go up and down completely randomly.
Pair Corralation between Itau Unibanco and Territorial Bancorp
Given the investment horizon of 90 days Itau Unibanco is expected to generate 3.96 times less return on investment than Territorial Bancorp. But when comparing it to its historical volatility, Itau Unibanco Banco is 1.57 times less risky than Territorial Bancorp. It trades about 0.02 of its potential returns per unit of risk. Territorial Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 829.00 in Territorial Bancorp on September 4, 2024 and sell it today you would earn a total of 255.00 from holding Territorial Bancorp or generate 30.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itau Unibanco Banco vs. Territorial Bancorp
Performance |
| Timeline |
| Itau Unibanco Banco |
| Territorial Bancorp |
Itau Unibanco and Territorial Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Unibanco and Territorial Bancorp
The main advantage of trading using opposite Itau Unibanco and Territorial Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco position performs unexpectedly, Territorial 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 Territorial Bancorp will offset losses from the drop in Territorial 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 |
| Territorial Bancorp vs. International Bancshares | Territorial Bancorp vs. Finward Bancorp | Territorial Bancorp vs. Aquagold International | Territorial Bancorp vs. Thrivent High Yield |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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