Correlation Between Banco Pan and Plano Plano

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

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

Diversification Opportunities for Banco Pan and Plano Plano

-0.29

Correlation Coefficient

Banco Pan  Plano Plano

Very good diversification

The 3 months correlation between Banco and Plano is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Banco Pan SA and Plano Plano Desenvolvimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plano Plano Desenvol and Banco Pan 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 Pan SA are associated (or correlated) with Plano Plano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plano Plano Desenvol has no effect on the direction of Banco Pan i.e., Banco Pan and Plano Plano go up and down completely randomly.

Pair Corralation between Banco Pan and Plano Plano

Assuming the 90 days trading horizon Banco Pan SA is expected to under-perform the Plano Plano. But the preferred stock apears to be less risky and, when comparing its historical volatility, Banco Pan SA is 1.15 times less risky than Plano Plano. The preferred stock trades about -0.32 of its potential returns per unit of risk. The Plano Plano Desenvolvimento is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,271  in Plano Plano Desenvolvimento on September 5, 2024 and sell it today you would lose (100.00) from holding Plano Plano Desenvolvimento or give up 7.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Banco Pan SA  vs.  Plano Plano Desenvolvimento

Banco Pan SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Pan SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Preferred 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.

Plano Plano Desenvol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plano Plano Desenvolvimento has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Banco Pan and Plano Plano

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

The idea behind Banco Pan SA and Plano Plano Desenvolvimento 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.