Correlation Between Banco De and Industrias Electro

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

By analyzing existing cross correlation between Banco de Credito and Industrias Electro Quimicas, you can compare the effects of market volatilities on Banco De and Industrias Electro 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 De with a short position of Industrias Electro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Industrias Electro.

Diversification Opportunities for Banco De and Industrias Electro

0.0

Correlation Coefficient

Banco De  Industrias Electro

Pay attention - limited upside

The 3 months correlation between Banco and Industrias is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banco de Credito and Industrias Electro Quimicas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias Electro and Banco De 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 de Credito are associated (or correlated) with Industrias Electro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias Electro has no effect on the direction of Banco De i.e., Banco De and Industrias Electro go up and down completely randomly.

Pair Corralation between Banco De and Industrias Electro

If you would invest  275.00  in Banco de Credito on October 11, 2024 and sell it today you would earn a total of  135.00  from holding Banco de Credito or generate 49.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Banco de Credito  vs.  Industrias Electro Quimicas

Banco de Credito

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banco de Credito are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Banco De exhibited solid returns over the last few months and may actually be approaching a breakup point.

Industrias Electro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Industrias Electro Quimicas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Industrias Electro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banco De and Industrias Electro

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

The idea behind Banco de Credito and Industrias Electro Quimicas 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.