Correlation Between Citizens Financial and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Citizens Financial 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 Citizens Financial and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Corp and Banco Bradesco SA, you can compare the effects of market volatilities on Citizens Financial 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 Citizens Financial with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Banco Bradesco.
Diversification Opportunities for Citizens Financial and Banco Bradesco
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citizens and Banco is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp 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 Citizens Financial 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 Citizens Financial Corp 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 Citizens Financial i.e., Citizens Financial and Banco Bradesco go up and down completely randomly.
Pair Corralation between Citizens Financial and Banco Bradesco
Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 1.06 times more return on investment than Banco Bradesco. However, Citizens Financial is 1.06 times more volatile than Banco Bradesco SA. It trades about 0.1 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about -0.04 per unit of risk. If you would invest 1,900 in Citizens Financial Corp on September 26, 2024 and sell it today you would earn a total of 525.00 from holding Citizens Financial Corp or generate 27.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.2% |
Values | Daily Returns |
Citizens Financial Corp vs. Banco Bradesco SA
Performance |
Timeline |
Citizens Financial Corp |
Banco Bradesco SA |
Citizens Financial and Banco Bradesco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citizens Financial and Banco Bradesco
The main advantage of trading using opposite Citizens Financial and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial 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.Citizens Financial vs. Century Next Financial | Citizens Financial vs. Triad Business Bank | Citizens Financial vs. First Ottawa Bancshares | Citizens Financial vs. First Community Financial |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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