Correlation Between BRASIL ON and Shore Bancshares

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

Diversification Opportunities for BRASIL ON and Shore Bancshares

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between BRASIL and Shore is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BRASIL ON NM and Shore Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shore Bancshares and BRASIL ON 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 BRASIL ON NM are associated (or correlated) with Shore Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shore Bancshares has no effect on the direction of BRASIL ON i.e., BRASIL ON and Shore Bancshares go up and down completely randomly.

Pair Corralation between BRASIL ON and Shore Bancshares

Assuming the 90 days trading horizon BRASIL ON is expected to generate 3.52 times less return on investment than Shore Bancshares. But when comparing it to its historical volatility, BRASIL ON NM is 1.04 times less risky than Shore Bancshares. It trades about 0.02 of its potential returns per unit of risk. Shore Bancshares is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  908.00  in Shore Bancshares on April 3, 2022 and sell it today you would earn a total of  951.00  from holding Shore Bancshares or generate 104.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.4%
ValuesDaily Returns

BRASIL ON NM  vs.  Shore Bancshares

 Performance (%) 
      Timeline 
BRASIL ON NM 
BRASIL Performance
0 of 100
Over the last 90 days BRASIL ON NM has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BRASIL ON is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

BRASIL Price Channel

Shore Bancshares 
Shore Performance
0 of 100
Over the last 90 days Shore Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0257
Payout Ratio
0.31
Last Split Factor
3:2
Forward Annual Dividend Rate
0.48
Dividend Date
2022-05-31
Ex Dividend Date
2022-05-12
Last Split Date
2006-06-06

Shore Price Channel

BRASIL ON and Shore Bancshares Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with BRASIL ON and Shore Bancshares

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

BRASIL ON NM

Pair trading matchups for BRASIL ON

The idea behind BRASIL ON NM and Shore Bancshares 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.

Shore Bancshares

Pair trading matchups for Shore Bancshares

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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