Correlation Between Banco Latinoamericano and Bar Harbor

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Banco Latinoamericano and Bar Harbor 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 Latinoamericano and Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Latinoamericano DE and Bar Harbor Bankshares, you can compare the effects of market volatilities on Banco Latinoamericano and Bar Harbor 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 Latinoamericano with a short position of Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Latinoamericano and Bar Harbor.

Diversification Opportunities for Banco Latinoamericano and Bar Harbor

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Banco and Bar Harbor is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Banco Latinoamericano DE and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares and Banco Latinoamericano 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 Latinoamericano DE are associated (or correlated) with Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Banco Latinoamericano i.e., Banco Latinoamericano and Bar Harbor go up and down completely randomly.

Pair Corralation between Banco Latinoamericano and Bar Harbor

Considering the 90-day investment horizon Banco Latinoamericano DE is expected to under-perform the Bar Harbor. But the stock apears to be less risky and, when comparing its historical volatility, Banco Latinoamericano DE is 1.11 times less risky than Bar Harbor. The stock trades about -0.09 of its potential returns per unit of risk. The Bar Harbor Bankshares is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,766  in Bar Harbor Bankshares on April 6, 2022 and sell it today you would lose (178.00)  from holding Bar Harbor Bankshares or give up 6.44% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Banco Latinoamericano DE  vs.  Bar Harbor Bankshares

 Performance (%) 
      Timeline 
Banco Latinoamericano 
Banco Performance
0 of 100
Over the last 90 days Banco Latinoamericano DE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0741
Payout Ratio
0.6
Forward Annual Dividend Rate
1.0
Dividend Date
2022-06-01
Ex Dividend Date
2022-05-13

Banco Price Channel

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 Latinoamericano and Bar Harbor Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Banco Latinoamericano and Bar Harbor

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

Banco Latinoamericano DE

Pair trading matchups for Banco Latinoamericano

Dupont Denemours vs. Banco Latinoamericano
Cansino Biologics vs. Banco Latinoamericano
China Life vs. Banco Latinoamericano
Ultrashort MSCI vs. Banco Latinoamericano
Kura Oncology vs. Banco Latinoamericano
Bidvest vs. Banco Latinoamericano
Otp Bank vs. Banco Latinoamericano
Kimball Electrnc vs. Banco Latinoamericano
Microsoft Corp vs. Banco Latinoamericano
Vmware vs. Banco Latinoamericano
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 Latinoamericano 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 Latinoamericano'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 Latinoamericano'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 Latinoamericano DE.
The idea behind Banco Latinoamericano DE and Bar Harbor Bankshares 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.

Bar Harbor Bankshares

Pair trading matchups for Bar Harbor

Ollies Bargain vs. Bar Harbor
Ultrashort MSCI vs. Bar Harbor
Visa vs. Bar Harbor
Chemocentryx vs. Bar Harbor
Vmware vs. Bar Harbor
Definitive Healthcare vs. Bar Harbor
Citigroup vs. Bar Harbor
Microsoft Corp vs. Bar Harbor
Cansino Biologics vs. Bar Harbor
Twitter vs. Bar Harbor
Kura Oncology 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.
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.

Other Complementary Tools

Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go