Correlation Between Nasdaq and Banco Bradesco

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

Diversification Opportunities for Nasdaq and Banco Bradesco

-0.92
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Nasdaq and Banco is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Banco Bradesco DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bradesco DRC and Nasdaq 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 Nasdaq Inc 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 DRC has no effect on the direction of Nasdaq i.e., Nasdaq and Banco Bradesco go up and down completely randomly.

Pair Corralation between Nasdaq and Banco Bradesco

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.5 times more return on investment than Banco Bradesco. However, Nasdaq Inc is 2.0 times less risky than Banco Bradesco. It trades about 0.15 of its potential returns per unit of risk. Banco Bradesco DRC is currently generating about -0.33 per unit of risk. If you would invest  7,308  in Nasdaq Inc on September 15, 2024 and sell it today you would earn a total of  704.00  from holding Nasdaq Inc or generate 9.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Nasdaq Inc  vs.  Banco Bradesco DRC

 Performance 
       Timeline  
Nasdaq Inc 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Banco Bradesco DRC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Banco Bradesco DRC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nasdaq and Banco Bradesco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nasdaq and Banco Bradesco

The main advantage of trading using opposite Nasdaq and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc and Banco Bradesco DRC 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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