Correlation Between Tectonic Financial and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial 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 Tectonic Financial and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and Banco Bradesco SA, you can compare the effects of market volatilities on Tectonic Financial 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 Tectonic Financial with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and Banco Bradesco.
Diversification Opportunities for Tectonic Financial and Banco Bradesco
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tectonic and Banco is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR 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 Tectonic Financial 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 Tectonic Financial PR 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 Tectonic Financial i.e., Tectonic Financial and Banco Bradesco go up and down completely randomly.
Pair Corralation between Tectonic Financial and Banco Bradesco
Assuming the 90 days horizon Tectonic Financial is expected to generate 12.44 times less return on investment than Banco Bradesco. But when comparing it to its historical volatility, Tectonic Financial PR is 1.56 times less risky than Banco Bradesco. It trades about 0.05 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Banco Bradesco SA on November 2, 2024 and sell it today you would earn a total of 24.00 from holding Banco Bradesco SA or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. Banco Bradesco SA
Performance |
| Timeline |
| Tectonic Financial |
| Banco Bradesco SA |
Tectonic Financial and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and Banco Bradesco
The main advantage of trading using opposite Tectonic Financial and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial 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.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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