Correlation Between Territorial Bancorp and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp and Itau Unibanco 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 Territorial Bancorp and Itau Unibanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and Itau Unibanco Banco, you can compare the effects of market volatilities on Territorial Bancorp and Itau Unibanco 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 Territorial Bancorp with a short position of Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and Itau Unibanco.
Diversification Opportunities for Territorial Bancorp and Itau Unibanco
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Territorial and Itau is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco and Territorial 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 Territorial Bancorp are associated (or correlated) with Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Territorial Bancorp i.e., Territorial Bancorp and Itau Unibanco go up and down completely randomly.
Pair Corralation between Territorial Bancorp and Itau Unibanco
Given the investment horizon of 90 days Territorial Bancorp is expected to generate 1.57 times more return on investment than Itau Unibanco. However, Territorial Bancorp is 1.57 times more volatile than Itau Unibanco Banco. It trades about 0.05 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about 0.02 per unit of risk. If you would invest 829.00 in Territorial Bancorp on September 4, 2024 and sell it today you would earn a total of 255.00 from holding Territorial Bancorp or generate 30.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Territorial Bancorp vs. Itau Unibanco Banco
Performance |
| Timeline |
| Territorial Bancorp |
| Itau Unibanco Banco |
Territorial Bancorp and Itau Unibanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Territorial Bancorp and Itau Unibanco
The main advantage of trading using opposite Territorial Bancorp and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco's long position.| Territorial Bancorp vs. International Bancshares | Territorial Bancorp vs. Finward Bancorp | Territorial Bancorp vs. Aquagold International | Territorial Bancorp vs. Thrivent High Yield |
| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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