Correlation Between Bahema Educao and Banco Alfa

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

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

Diversification Opportunities for Bahema Educao and Banco Alfa

0.0

Correlation Coefficient

Bahema Educao  Banco Alfa

Pay attention - limited upside

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

Pair Corralation between Bahema Educao and Banco Alfa

If you would invest  1,286  in Banco Alfa de on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Banco Alfa de or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bahema Educao SA  vs.  Banco Alfa de

Bahema Educao SA

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Bahema Educao SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Banco Alfa de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Alfa de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Banco Alfa is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bahema Educao and Banco Alfa

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

The idea behind Bahema Educao SA and Banco Alfa de 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.