Correlation Between Banco Macro and BankUnited

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

Diversification Opportunities for Banco Macro and BankUnited

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Banco and BankUnited is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited and Banco Macro 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 Macro SA are associated (or correlated) with BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Banco Macro i.e., Banco Macro and BankUnited go up and down completely randomly.

Pair Corralation between Banco Macro and BankUnited

Considering the 90-day investment horizon Banco Macro SA is expected to generate 1.25 times more return on investment than BankUnited. However, Banco Macro is 1.25 times more volatile than BankUnited. It trades about -0.03 of its potential returns per unit of risk. BankUnited is currently generating about -0.06 per unit of risk. If you would invest  1,341  in Banco Macro SA on April 4, 2022 and sell it today you would lose (178.00)  from holding Banco Macro SA or give up 13.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Banco Macro SA  vs.  BankUnited

 Performance (%) 
      Timeline 
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

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 uncertain 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 and BankUnited Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Banco Macro and BankUnited

The main advantage of trading using opposite Banco Macro and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.
The idea behind Banco Macro SA and BankUnited 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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