Correlation Between Patria Bank and Unisem SA
Can any of the company-specific risk be diversified away by investing in both Patria Bank and Unisem 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 Unisem 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 Unisem SA, you can compare the effects of market volatilities on Patria Bank and Unisem 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 Unisem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Bank and Unisem SA.
Diversification Opportunities for Patria Bank and Unisem SA
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Patria and Unisem is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Patria Bank SA and Unisem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisem SA 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 Unisem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisem SA has no effect on the direction of Patria Bank i.e., Patria Bank and Unisem SA go up and down completely randomly.
Pair Corralation between Patria Bank and Unisem SA
Assuming the 90 days trading horizon Patria Bank SA is expected to under-perform the Unisem SA. But the stock apears to be less risky and, when comparing its historical volatility, Patria Bank SA is 2.57 times less risky than Unisem SA. The stock trades about -0.03 of its potential returns per unit of risk. The Unisem SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Unisem SA on September 5, 2024 and sell it today you would lose (2.00) from holding Unisem SA or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patria Bank SA vs. Unisem SA
Performance |
| Timeline |
| Patria Bank SA |
| Unisem SA |
Patria Bank and Unisem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Bank and Unisem SA
The main advantage of trading using opposite Patria Bank and Unisem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Bank position performs unexpectedly, Unisem 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 Unisem SA will offset losses from the drop in Unisem SA's long position.| Patria Bank vs. Teraplast Bist | Patria Bank vs. Electroarges S | Patria Bank vs. IAR SA | Patria Bank vs. Compa Sibiu |
| Unisem SA vs. Digi Communications NV | Unisem SA vs. Evergent Investments SA | Unisem SA vs. Patria Bank SA | Unisem SA vs. IM Vinaria Purcari |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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