Correlation Between Bar Harbor and Banco Macro

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

Diversification Opportunities for Bar Harbor and Banco Macro

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bar Harbor and Banco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bar Harbor Bankshares 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 Bar Harbor 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 Bar Harbor Bankshares 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 Bar Harbor i.e., Bar Harbor and Banco Macro go up and down completely randomly.

Pair Corralation between Bar Harbor and Banco Macro

Considering the 90-day investment horizon Bar Harbor Bankshares is expected to generate 0.73 times more return on investment than Banco Macro. However, Bar Harbor Bankshares is 1.38 times less risky than Banco Macro. It trades about -0.04 of its potential returns per unit of risk. Banco Macro SA is currently generating about -0.05 per unit of risk. If you would invest  2,932  in Bar Harbor Bankshares on April 6, 2022 and sell it today you would lose (289.00)  from holding Bar Harbor Bankshares or give up 9.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bar Harbor Bankshares  vs.  Banco Macro SA

 Performance (%) 
      Timeline 
Bar Harbor Bankshares 
Bar Harbor Performance
0 of 100
Over the last 90 days Bar Harbor Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Bar Harbor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0393
Payout Ratio
0.37
Last Split Factor
3:2
Forward Annual Dividend Rate
1.04
Dividend Date
2022-06-17
Ex Dividend Date
2022-05-16
Last Split Date
2017-03-22

Bar Harbor 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 weak 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

Bar Harbor and Banco Macro Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Bar Harbor and Banco Macro

The main advantage of trading using opposite Bar Harbor and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bar Harbor 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.

Bar Harbor Bankshares

Pair trading matchups for Bar Harbor

Microsoft Corp vs. Bar Harbor
Chemocentryx vs. Bar Harbor
Cansino Biologics vs. Bar Harbor
Ollies Bargain vs. Bar Harbor
Bidvest vs. Bar Harbor
Visa vs. Bar Harbor
Citigroup vs. Bar Harbor
Definitive Healthcare vs. Bar Harbor
Otp Bank vs. Bar Harbor
Kimball Electrnc vs. Bar Harbor
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Bar Harbor as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Bar Harbor's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Bar Harbor's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Bar Harbor Bankshares.
The idea behind Bar Harbor Bankshares 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.

Banco Macro SA

Pair trading matchups for Banco Macro

Chemocentryx vs. Banco Macro
China Life vs. Banco Macro
Citigroup vs. Banco Macro
Bidvest vs. Banco Macro
Twitter vs. Banco Macro
Walker Dunlop vs. Banco Macro
Ultrashort MSCI vs. Banco Macro
Microsoft Corp vs. Banco Macro
Definitive Healthcare vs. Banco Macro
Ollies Bargain vs. Banco Macro
Dupont Denemours vs. Banco Macro
Kimball Electrnc vs. Banco Macro
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Banco Macro as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Banco Macro's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Banco Macro's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Banco Macro SA.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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