Correlation Between NYCB Old and Itau Unibanco

Can any of the company-specific risk be diversified away by investing in both NYCB Old and Itau Unibanco 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 NYCB Old and Itau Unibanco into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for NYCB Old and Itau Unibanco

0.0

Correlation Coefficient

NYCB Old  Itau Unibanco

Pay attention - limited upside

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

Pair Corralation between NYCB Old and Itau Unibanco

If you would invest  426.00  in Itau Unibanco Banco on December 26, 2024 and sell it today you would earn a total of  136.00  from holding Itau Unibanco Banco or generate 31.92% return on investment over 90 days.

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

NYCB Old  vs.  Itau Unibanco Banco

NYCB Old

Risk-Adjusted Performance

Very Weak

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

Itau Unibanco Banco

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Itau Unibanco Banco are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Itau Unibanco sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NYCB Old and Itau Unibanco

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

The idea behind NYCB Old and Itau Unibanco Banco 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.