Correlation Between Banco Bradesco and Home Federal
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Home Federal 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 Home Federal 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 Home Federal Bancorp, you can compare the effects of market volatilities on Banco Bradesco and Home Federal 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 Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Home Federal.
Diversification Opportunities for Banco Bradesco and Home Federal
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Banco and Home is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal Bancorp 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 Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Home Federal go up and down completely randomly.
Pair Corralation between Banco Bradesco and Home Federal
Given the investment horizon of 90 days Banco Bradesco SA is expected to generate 0.77 times more return on investment than Home Federal. However, Banco Bradesco SA is 1.31 times less risky than Home Federal. It trades about 0.08 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about 0.04 per unit of risk. If you would invest 177.00 in Banco Bradesco SA on December 2, 2024 and sell it today you would earn a total of 11.00 from holding Banco Bradesco SA or generate 6.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 80.0% |
Values | Daily Returns |
Banco Bradesco SA vs. Home Federal Bancorp
Performance |
Timeline |
Banco Bradesco SA |
Home Federal Bancorp |
Banco Bradesco and Home Federal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Bradesco and Home Federal
The main advantage of trading using opposite Banco Bradesco and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Home Federal 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 Home Federal will offset losses from the drop in Home Federal's long position.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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |