Correlation Between Patria Bank and Biofarm Bucure
Can any of the company-specific risk be diversified away by investing in both Patria Bank and Biofarm Bucure 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 Patria Bank and Biofarm Bucure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patria Bank SA and Biofarm Bucure, you can compare the effects of market volatilities on Patria Bank and Biofarm Bucure 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 Patria Bank with a short position of Biofarm Bucure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Bank and Biofarm Bucure.
Diversification Opportunities for Patria Bank and Biofarm Bucure
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Patria and Biofarm is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Patria Bank SA and Biofarm Bucure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofarm Bucure and Patria Bank 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 Patria Bank SA are associated (or correlated) with Biofarm Bucure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofarm Bucure has no effect on the direction of Patria Bank i.e., Patria Bank and Biofarm Bucure go up and down completely randomly.
Pair Corralation between Patria Bank and Biofarm Bucure
Assuming the 90 days trading horizon Patria Bank SA is expected to generate 1.19 times more return on investment than Biofarm Bucure. However, Patria Bank is 1.19 times more volatile than Biofarm Bucure. It trades about 0.08 of its potential returns per unit of risk. Biofarm Bucure is currently generating about -0.08 per unit of risk. If you would invest 7.55 in Patria Bank SA on October 24, 2024 and sell it today you would earn a total of 0.65 from holding Patria Bank SA or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patria Bank SA vs. Biofarm Bucure
Performance |
| Timeline |
| Patria Bank SA |
| Biofarm Bucure |
Patria Bank and Biofarm Bucure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Bank and Biofarm Bucure
The main advantage of trading using opposite Patria Bank and Biofarm Bucure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Bank position performs unexpectedly, Biofarm Bucure 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 Biofarm Bucure will offset losses from the drop in Biofarm Bucure's long position.| Patria Bank vs. Infinity Capital Investments | Patria Bank vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Patria Bank vs. TRANSILVANIA INVESTMENTS ALLIANCE | Patria Bank vs. TRANSILVANIA LEASING SI |
| Biofarm Bucure vs. Compania Hoteliera InterContinental | Biofarm Bucure vs. Safetech Innovations SA | Biofarm Bucure vs. Patria Bank SA | Biofarm Bucure vs. AROBS TRANSILVANIA SOFTWARE |
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 Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |