Correlation Between Ledesma SAAI and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI 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 Ledesma SAAI and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and Banco Bradesco DRC, you can compare the effects of market volatilities on Ledesma SAAI 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 Ledesma SAAI with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and Banco Bradesco.
Diversification Opportunities for Ledesma SAAI and Banco Bradesco
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ledesma and Banco is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI and Banco Bradesco DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bradesco DRC and Ledesma SAAI 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 Ledesma SAAI 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 DRC has no effect on the direction of Ledesma SAAI i.e., Ledesma SAAI and Banco Bradesco go up and down completely randomly.
Pair Corralation between Ledesma SAAI and Banco Bradesco
Assuming the 90 days trading horizon Ledesma SAAI is expected to under-perform the Banco Bradesco. But the stock apears to be less risky and, when comparing its historical volatility, Ledesma SAAI is 1.41 times less risky than Banco Bradesco. The stock trades about -0.08 of its potential returns per unit of risk. The Banco Bradesco DRC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 219,000 in Banco Bradesco DRC on October 20, 2024 and sell it today you would earn a total of 14,000 from holding Banco Bradesco DRC or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ledesma SAAI vs. Banco Bradesco DRC
Performance |
| Timeline |
| Ledesma SAAI |
| Banco Bradesco DRC |
Ledesma SAAI and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and Banco Bradesco
The main advantage of trading using opposite Ledesma SAAI and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI 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.| Ledesma SAAI vs. Molinos Agro SA | Ledesma SAAI vs. Cresud SA | Ledesma SAAI vs. San Miguel AG | Ledesma SAAI vs. Inversora Juramento SA |
| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Grupo Financiero Galicia | Banco Bradesco vs. Banco Santander Ro | Banco Bradesco vs. Central Puerto SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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