Correlation Between BankUnited and Banco Macro

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

Diversification Opportunities for BankUnited and Banco Macro

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between BankUnited and Banco is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding BankUnited 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 BankUnited 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 BankUnited 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 BankUnited i.e., BankUnited and Banco Macro go up and down completely randomly.

Pair Corralation between BankUnited and Banco Macro

Considering the 90-day investment horizon BankUnited is expected to generate 0.7 times more return on investment than Banco Macro. However, BankUnited is 1.42 times less risky than Banco Macro. It trades about -0.02 of its potential returns per unit of risk. Banco Macro SA is currently generating about -0.02 per unit of risk. If you would invest  4,181  in BankUnited on April 6, 2022 and sell it today you would lose (617.00)  from holding BankUnited or give up 14.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

BankUnited  vs.  Banco Macro SA

 Performance (%) 
      Timeline 
BankUnited 
BankUnited Performance
0 of 100
Over the last 90 days BankUnited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in August 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0276
Payout Ratio
0.25
Forward Annual Dividend Rate
1.0
Dividend Date
2022-07-29
Ex Dividend Date
2022-07-13

BankUnited 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

BankUnited and Banco Macro Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with BankUnited and Banco Macro

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

BankUnited

Pair trading matchups for BankUnited

Cansino Biologics vs. BankUnited
Walker Dunlop vs. BankUnited
Definitive Healthcare vs. BankUnited
Visa vs. BankUnited
Otp Bank vs. BankUnited
Bidvest vs. BankUnited
Ultrashort MSCI vs. BankUnited
Vmware vs. BankUnited
Microsoft Corp vs. BankUnited
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 BankUnited 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. BankUnited'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, BankUnited'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 BankUnited.
The idea behind BankUnited 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

Bidvest vs. Banco Macro
Vmware vs. Banco Macro
Ultrashort MSCI vs. Banco Macro
Cansino Biologics vs. Banco Macro
China Life vs. Banco Macro
Dupont Denemours vs. Banco Macro
Citigroup vs. Banco Macro
Twitter vs. Banco Macro
Walker Dunlop vs. Banco Macro
Visa vs. Banco Macro
Chemocentryx vs. Banco Macro
Kura Oncology 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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