Correlation Between Patria Bank and SCUT SA
Can any of the company-specific risk be diversified away by investing in both Patria Bank and SCUT SA 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 SCUT SA 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 SCUT SA BACAU, you can compare the effects of market volatilities on Patria Bank and SCUT SA 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 SCUT SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Bank and SCUT SA.
Diversification Opportunities for Patria Bank and SCUT SA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Patria and SCUT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Patria Bank SA and SCUT SA BACAU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCUT SA BACAU 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 SCUT SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCUT SA BACAU has no effect on the direction of Patria Bank i.e., Patria Bank and SCUT SA go up and down completely randomly.
Pair Corralation between Patria Bank and SCUT SA
Assuming the 90 days trading horizon Patria Bank SA is expected to under-perform the SCUT SA. But the stock apears to be less risky and, when comparing its historical volatility, Patria Bank SA is 5.44 times less risky than SCUT SA. The stock trades about -0.13 of its potential returns per unit of risk. The SCUT SA BACAU is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,360 in SCUT SA BACAU on November 4, 2024 and sell it today you would earn a total of 640.00 from holding SCUT SA BACAU or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Patria Bank SA vs. SCUT SA BACAU
Performance |
| Timeline |
| Patria Bank SA |
| SCUT SA BACAU |
Patria Bank and SCUT SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Bank and SCUT SA
The main advantage of trading using opposite Patria Bank and SCUT SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Bank position performs unexpectedly, SCUT SA 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 SCUT SA will offset losses from the drop in SCUT SA's long position.| Patria Bank vs. Compania Hoteliera InterContinental | Patria Bank vs. Evergent Investments SA | Patria Bank vs. AROBS TRANSILVANIA SOFTWARE | Patria Bank vs. Turism Hotelur |
| SCUT SA vs. TTS | SCUT SA vs. TRANSILVANIA INVESTMENTS ALLIANCE | SCUT SA vs. Med Life SA | SCUT SA vs. Remarul 16 Februarie |
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 CEOs Directory module to screen CEOs from public companies around the world.
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