Correlation Between VersaBank and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both VersaBank 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 VersaBank and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and Banco Bradesco SA, you can compare the effects of market volatilities on VersaBank 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 VersaBank with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and Banco Bradesco.
Diversification Opportunities for VersaBank and Banco Bradesco
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VersaBank and Banco is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank 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 VersaBank 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 VersaBank 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 VersaBank i.e., VersaBank and Banco Bradesco go up and down completely randomly.
Pair Corralation between VersaBank and Banco Bradesco
Given the investment horizon of 90 days VersaBank is expected to generate 1.44 times more return on investment than Banco Bradesco. However, VersaBank is 1.44 times more volatile than Banco Bradesco SA. It trades about 0.42 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about -0.39 per unit of risk. If you would invest 1,475 in VersaBank on August 28, 2024 and sell it today you would earn a total of 284.00 from holding VersaBank or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. Banco Bradesco SA
Performance |
| Timeline |
| VersaBank |
| Banco Bradesco SA |
VersaBank and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and Banco Bradesco
The main advantage of trading using opposite VersaBank and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank 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.| VersaBank vs. Mountain Commerce Bancorp | VersaBank vs. American Riviera Bank | VersaBank vs. Home Federal Bancorp | VersaBank vs. Prime Meridian Holding |
| 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |