Correlation Between Bank First and Banco Macro

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

Diversification Opportunities for Bank First and Banco Macro

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Bank First and Banco is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bank First National and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Bank First 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 Bank First National are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Bank First i.e., Bank First and Banco Macro go up and down completely randomly.

Pair Corralation between Bank First and Banco Macro

Considering the 90-day investment horizon Bank First National is expected to generate 0.41 times more return on investment than Banco Macro. However, Bank First National is 2.41 times less risky than Banco Macro. It trades about 0.06 of its potential returns per unit of risk. Banco Macro SA is currently generating about -0.03 per unit of risk. If you would invest  7,127  in Bank First National on April 4, 2022 and sell it today you would earn a total of  545.00  from holding Bank First National or generate 7.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bank First National  vs.  Banco Macro SA

 Performance (%) 
      Timeline 
Bank First National 
Bank First Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank First National are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Bank First may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0115
Payout Ratio
0.2
Last Split Factor
2:1
Forward Annual Dividend Rate
0.88
Dividend Date
2022-07-06
Ex Dividend Date
2022-06-21
Last Split Date
2002-10-21

Bank First Price Channel

Banco Macro SA 
Banco Performance
0 of 100
Over the last 90 days Banco Macro SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0617
Payout Ratio
0.15
Forward Annual Dividend Rate
0.72
Dividend Date
2022-06-30
Ex Dividend Date
2022-06-03

Banco Price Channel

Bank First and Banco Macro Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Bank First and Banco Macro

The main advantage of trading using opposite Bank First and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank First position performs unexpectedly, Banco Macro 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 Macro will offset losses from the drop in Banco Macro's long position.
The idea behind Bank First National and Banco Macro 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 CEO Directory module to screen CEOs from public companies around the world.

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