Correlation Between Regional SAB and Banco Del

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

By analyzing existing cross correlation between Regional SAB de and Banco del Bajo, you can compare the effects of market volatilities on Regional SAB and Banco Del 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 Regional SAB with a short position of Banco Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional SAB and Banco Del.

Diversification Opportunities for Regional SAB and Banco Del

0.39

Correlation Coefficient

Regional SAB  Banco Del

Weak diversification

The 3 months correlation between Regional and Banco is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Regional SAB de and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo and Regional SAB 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 Regional SAB de are associated (or correlated) with Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of Regional SAB i.e., Regional SAB and Banco Del go up and down completely randomly.

Pair Corralation between Regional SAB and Banco Del

Assuming the 90 days horizon Regional SAB de is expected to generate 0.86 times more return on investment than Banco Del. However, Regional SAB de is 1.16 times less risky than Banco Del. It trades about 0.0 of its potential returns per unit of risk. Banco del Bajo is currently generating about 0.0 per unit of risk. If you would invest  11,895  in Regional SAB de on October 9, 2024 and sell it today you would lose (178.00) from holding Regional SAB de or give up 1.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Regional SAB de  vs.  Banco del Bajo

Regional SAB de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regional SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Regional SAB is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Banco del Bajo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco del Bajo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking indicators, Banco Del is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Regional SAB and Banco Del

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

The idea behind Regional SAB de and Banco del Bajo 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.