Correlation Between Turkiye Halk and Banco Bradesco

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Can any of the company-specific risk be diversified away by investing in both Turkiye Halk 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 Turkiye Halk and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turkiye Halk Bankasi and Banco Bradesco SA, you can compare the effects of market volatilities on Turkiye Halk 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 Turkiye Halk with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Halk and Banco Bradesco.

Diversification Opportunities for Turkiye Halk and Banco Bradesco

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Turkiye and Banco is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Halk Bankasi 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 Turkiye Halk 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 Turkiye Halk Bankasi 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 Turkiye Halk i.e., Turkiye Halk and Banco Bradesco go up and down completely randomly.

Pair Corralation between Turkiye Halk and Banco Bradesco

Assuming the 90 days trading horizon Turkiye Halk Bankasi is expected to under-perform the Banco Bradesco. In addition to that, Turkiye Halk is 1.7 times more volatile than Banco Bradesco SA. It trades about -0.28 of its total potential returns per unit of risk. Banco Bradesco SA is currently generating about 0.1 per unit of volatility. If you would invest  284.00  in Banco Bradesco SA on December 29, 2023 and sell it today you would earn a total of  7.00  from holding Banco Bradesco SA or generate 2.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

Turkiye Halk Bankasi  vs.  Banco Bradesco SA

 Performance 
       Timeline  
Turkiye Halk Bankasi 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Halk Bankasi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Turkiye Halk demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Banco Bradesco SA 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 unfluctuating performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Turkiye Halk and Banco Bradesco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Turkiye Halk and Banco Bradesco

The main advantage of trading using opposite Turkiye Halk and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Halk 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.
The idea behind Turkiye Halk Bankasi and Banco Bradesco SA 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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