Correlation Between Itasa Investimentos and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Itasa Investimentos 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 Itasa Investimentos and Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itasa Investimentos and Banco Bradesco SA, you can compare the effects of market volatilities on Itasa Investimentos 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 Itasa Investimentos with a short position of Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itasa Investimentos and Banco Bradesco.
Diversification Opportunities for Itasa Investimentos and Banco Bradesco
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Itasa and Banco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Itasa Investimentos 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 Itasa Investimentos 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 Itasa Investimentos 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 Itasa Investimentos i.e., Itasa Investimentos and Banco Bradesco go up and down completely randomly.
Pair Corralation between Itasa Investimentos and Banco Bradesco
Assuming the 90 days trading horizon Itasa Investimentos is expected to generate 2.02 times less return on investment than Banco Bradesco. But when comparing it to its historical volatility, Itasa Investimentos is 1.34 times less risky than Banco Bradesco. It trades about 0.14 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,640 in Banco Bradesco SA on September 1, 2025 and sell it today you would earn a total of 325.00 from holding Banco Bradesco SA or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itasa Investimentos vs. Banco Bradesco SA
Performance |
| Timeline |
| Itasa Investimentos |
| Banco Bradesco SA |
Itasa Investimentos and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itasa Investimentos and Banco Bradesco
The main advantage of trading using opposite Itasa Investimentos and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itasa Investimentos 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.| Itasa Investimentos vs. Teladoc Health | Itasa Investimentos vs. MAHLE Metal Leve | Itasa Investimentos vs. HCA Healthcare, | Itasa Investimentos vs. Verizon Communications |
| Banco Bradesco vs. Omega Healthcare Investors, | Banco Bradesco vs. Technos SA | Banco Bradesco vs. Hospital Mater Dei | Banco Bradesco vs. Micron Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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