Correlation Between Banco Bradesco and KORE Group

Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and KORE Group 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 KORE Group 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 KORE Group Holdings, you can compare the effects of market volatilities on Banco Bradesco and KORE Group 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 KORE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and KORE Group.

Diversification Opportunities for Banco Bradesco and KORE Group

0.18

Correlation Coefficient

Banco Bradesco  KORE Group

Average diversification

The 3 months correlation between Banco and KORE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and KORE Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORE Group Holdings 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 KORE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORE Group Holdings has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and KORE Group go up and down completely randomly.

Pair Corralation between Banco Bradesco and KORE Group

Given the investment horizon of 90 days Banco Bradesco is expected to generate 5.05 times less return on investment than KORE Group. But when comparing it to its historical volatility, Banco Bradesco SA is 8.52 times less risky than KORE Group. It trades about 0.33 of its potential returns per unit of risk. KORE Group Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  147.00  in KORE Group Holdings on October 23, 2024 and sell it today you would earn a total of  55.00  from holding KORE Group Holdings or generate 37.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Banco Bradesco SA  vs.  KORE Group Holdings

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 conflicting performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

KORE Group Holdings

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KORE Group Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, KORE Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banco Bradesco and KORE Group

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

The idea behind Banco Bradesco SA and KORE Group Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.