Correlation Between Triumph Financial and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Triumph 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 Triumph 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 Triumph Financial and Banco Bradesco SA, you can compare the effects of market volatilities on Triumph 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 Triumph Financial with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triumph Financial and Banco Bradesco.
Diversification Opportunities for Triumph Financial and Banco Bradesco
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Triumph and Banco is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Financial 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 Triumph 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 Triumph Financial 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 Triumph Financial i.e., Triumph Financial and Banco Bradesco go up and down completely randomly.
Pair Corralation between Triumph Financial and Banco Bradesco
Assuming the 90 days horizon Triumph Financial is expected to generate 0.84 times more return on investment than Banco Bradesco. However, Triumph Financial is 1.19 times less risky than Banco Bradesco. It trades about 0.03 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about 0.01 per unit of risk. If you would invest 1,984 in Triumph Financial on August 28, 2024 and sell it today you would earn a total of 391.00 from holding Triumph Financial or generate 19.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triumph Financial vs. Banco Bradesco SA
Performance |
| Timeline |
| Triumph Financial |
| Banco Bradesco SA |
Triumph Financial and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triumph Financial and Banco Bradesco
The main advantage of trading using opposite Triumph Financial and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph 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.| Triumph Financial vs. Fifth Third Bancorp | Triumph Financial vs. Huntington Bancshares Incorporated | Triumph Financial vs. MT Bank |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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