Correlation Between Westamerica Bancorporation and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Westamerica Bancorporation and Banco Macro 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 Westamerica Bancorporation and Banco Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westamerica Bancorporation and Banco Macro SA, you can compare the effects of market volatilities on Westamerica Bancorporation and Banco Macro 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 Westamerica Bancorporation with a short position of Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westamerica Bancorporation and Banco Macro.
Diversification Opportunities for Westamerica Bancorporation and Banco Macro
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westamerica and Banco is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Westamerica Bancorp. and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Westamerica Bancorporation 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 Westamerica Bancorporation are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Westamerica Bancorporation i.e., Westamerica Bancorporation and Banco Macro go up and down completely randomly.
Pair Corralation between Westamerica Bancorporation and Banco Macro
Given the investment horizon of 90 days Westamerica Bancorporation is expected to generate 0.41 times more return on investment than Banco Macro. However, Westamerica Bancorporation is 2.44 times less risky than Banco Macro. It trades about 0.04 of its potential returns per unit of risk. Banco Macro SA is currently generating about -0.18 per unit of risk. If you would invest 5,130 in Westamerica Bancorporation on November 5, 2024 and sell it today you would earn a total of 46.00 from holding Westamerica Bancorporation or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westamerica Bancorp. vs. Banco Macro SA
Performance |
| Timeline |
| Westamerica Bancorporation |
| Banco Macro SA |
Westamerica Bancorporation and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westamerica Bancorporation and Banco Macro
The main advantage of trading using opposite Westamerica Bancorporation and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westamerica Bancorporation position performs unexpectedly, Banco Macro 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 Macro will offset losses from the drop in Banco Macro's long position.| Westamerica Bancorporation vs. Heritage Commerce Corp | Westamerica Bancorporation vs. Heritage Financial | Westamerica Bancorporation vs. Penns Woods Bancorp | Westamerica Bancorporation vs. 1st Source |
| Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. BBVA Banco Frances | Banco Macro vs. Banco Bradesco SA | Banco Macro vs. Itau Unibanco Banco |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |