Correlation Between Teb Bancorp and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Teb Bancorp 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 Teb Bancorp and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teb Bancorp and Banco Bradesco SA, you can compare the effects of market volatilities on Teb Bancorp 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 Teb Bancorp with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teb Bancorp and Banco Bradesco.
Diversification Opportunities for Teb Bancorp and Banco Bradesco
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teb and Banco is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Teb Bancorp and Banco Bradesco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bradesco SA and Teb Bancorp 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 Teb Bancorp 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 SA has no effect on the direction of Teb Bancorp i.e., Teb Bancorp and Banco Bradesco go up and down completely randomly.
Pair Corralation between Teb Bancorp and Banco Bradesco
Given the investment horizon of 90 days Teb Bancorp is expected to generate 2.24 times more return on investment than Banco Bradesco. However, Teb Bancorp is 2.24 times more volatile than Banco Bradesco SA. It trades about 0.18 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about -0.3 per unit of risk. If you would invest 650.00 in Teb Bancorp on September 24, 2024 and sell it today you would earn a total of 148.00 from holding Teb Bancorp or generate 22.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teb Bancorp vs. Banco Bradesco SA
Performance |
| Timeline |
| Teb Bancorp |
| Banco Bradesco SA |
Teb Bancorp and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teb Bancorp and Banco Bradesco
The main advantage of trading using opposite Teb Bancorp and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teb Bancorp 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.| Teb Bancorp vs. Banco Bradesco SA | Teb Bancorp vs. Itau Unibanco Banco | Teb Bancorp vs. Lloyds Banking Group | Teb Bancorp vs. Deutsche Bank AG |
| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Banco Macro SA | Banco Bradesco vs. Lloyds Banking Group | Banco Bradesco vs. Grupo Financiero Galicia |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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