Correlation Between Banco Bradesco and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Compania Cervecerias 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 Bradesco and Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bradesco SA and Compania Cervecerias Unidas, you can compare the effects of market volatilities on Banco Bradesco and Compania Cervecerias 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 Bradesco with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Compania Cervecerias.
Diversification Opportunities for Banco Bradesco and Compania Cervecerias
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banco and Compania is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and Banco Bradesco 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 Bradesco SA are associated (or correlated) with Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Banco Bradesco and Compania Cervecerias
Considering the 90-day investment horizon Banco Bradesco SA is expected to generate 1.19 times more return on investment than Compania Cervecerias. However, Banco Bradesco is 1.19 times more volatile than Compania Cervecerias Unidas. It trades about 0.12 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.07 per unit of risk. If you would invest 281.00 in Banco Bradesco SA on June 9, 2025 and sell it today you would earn a total of 37.00 from holding Banco Bradesco SA or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Banco Bradesco SA |
| Compania Cervecerias |
Banco Bradesco and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Compania Cervecerias
The main advantage of trading using opposite Banco Bradesco and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Banco Macro SA | Banco Bradesco vs. Lloyds Banking Group | Banco Bradesco vs. Grupo Financiero Galicia |
| Compania Cervecerias vs. Fomento Economico Mexicano | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Carlsberg AS |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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