Correlation Between Banco Bradesco and Jonestown Bank

Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Jonestown Bank 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 Banco Bradesco and Jonestown Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banco Bradesco SA and Jonestown Bank and, you can compare the effects of market volatilities on Banco Bradesco and Jonestown Bank 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 Banco Bradesco with a short position of Jonestown Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Jonestown Bank.

Diversification Opportunities for Banco Bradesco and Jonestown Bank

-0.74

Correlation Coefficient

Banco Bradesco  Jonestown Bank

Pay attention - limited upside

The 3 months correlation between Banco and Jonestown is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Jonestown Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jonestown Bank and Banco Bradesco 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 Banco Bradesco SA are associated (or correlated) with Jonestown Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jonestown Bank has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Jonestown Bank go up and down completely randomly.

Pair Corralation between Banco Bradesco and Jonestown Bank

Assuming the 90 days trading horizon Banco Bradesco SA is expected to under-perform the Jonestown Bank. In addition to that, Banco Bradesco is 1.04 times more volatile than Jonestown Bank and. It trades about -0.23 of its total potential returns per unit of risk. Jonestown Bank and is currently generating about 0.11 per unit of volatility. If you would invest  2,700  in Jonestown Bank and on October 25, 2024 and sell it today you would earn a total of  285.00  from holding Jonestown Bank and or generate 10.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Banco Bradesco SA  vs.  Jonestown Bank and

Banco Bradesco SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Bradesco SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jonestown Bank

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jonestown Bank and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Jonestown Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Banco Bradesco and Jonestown Bank

The main advantage of trading using opposite Banco Bradesco and Jonestown Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Jonestown Bank 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 Jonestown Bank will offset losses from the drop in Jonestown Bank's long position.

The idea behind Banco Bradesco SA and Jonestown Bank and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.