Correlation Between Raiffeisen Bank and Itau Unibanco

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

By analyzing existing cross correlation between Raiffeisen Bank International and Itau Unibanco Banco, you can compare the effects of market volatilities on Raiffeisen Bank and Itau Unibanco 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 Raiffeisen Bank with a short position of Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raiffeisen Bank and Itau Unibanco.

Diversification Opportunities for Raiffeisen Bank and Itau Unibanco

-0.25

Correlation Coefficient

Raiffeisen Bank  Itau Unibanco

Very good diversification

The 3 months correlation between Raiffeisen and Itau is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Raiffeisen Bank International and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco and Raiffeisen Bank 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 Raiffeisen Bank International are associated (or correlated) with Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Raiffeisen Bank i.e., Raiffeisen Bank and Itau Unibanco go up and down completely randomly.

Pair Corralation between Raiffeisen Bank and Itau Unibanco

Assuming the 90 days horizon Raiffeisen Bank International is expected to generate 1.2 times more return on investment than Itau Unibanco. However, Raiffeisen Bank is 1.2 times more volatile than Itau Unibanco Banco. It trades about 0.17 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about -0.28 per unit of risk. If you would invest  462.00  in Raiffeisen Bank International on September 25, 2024 and sell it today you would earn a total of  48.00  from holding Raiffeisen Bank International or generate 10.39% return on investment over 90 days.

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

Raiffeisen Bank International  vs.  Itau Unibanco Banco

Raiffeisen Bank Inte

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Raiffeisen Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Itau Unibanco Banco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Itau Unibanco Banco 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 basic 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.

Pair Trading with Raiffeisen Bank and Itau Unibanco

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

The idea behind Raiffeisen Bank International and Itau Unibanco Banco 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.