Correlation Between Banco De and Matba Rofex

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

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

Diversification Opportunities for Banco De and Matba Rofex

0.0

Correlation Coefficient

Banco De  Matba Rofex

Pay attention - limited upside

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

Pair Corralation between Banco De and Matba Rofex

If you would invest  33,200  in Banco de Valores on September 2, 2024 and sell it today you would earn a total of  5,400  from holding Banco de Valores or generate 16.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Banco de Valores  vs.  Matba Rofex SA

Banco de Valores

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banco de Valores are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Banco De sustained solid returns over the last few months and may actually be approaching a breakup point.

Matba Rofex SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matba Rofex SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Matba Rofex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banco De and Matba Rofex

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

The idea behind Banco de Valores and Matba Rofex SA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.