Correlation Between Banco Macro and Banco Latinoamericano

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Banco Macro and Banco Latinoamericano 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 Banco Latinoamericano 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 Banco Latinoamericano DE, you can compare the effects of market volatilities on Banco Macro and Banco Latinoamericano 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 Banco Latinoamericano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and Banco Latinoamericano.

Diversification Opportunities for Banco Macro and Banco Latinoamericano

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Banco and Banco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and Banco Latinoamericano DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Latinoamericano 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 Banco Latinoamericano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Latinoamericano has no effect on the direction of Banco Macro i.e., Banco Macro and Banco Latinoamericano go up and down completely randomly.

Pair Corralation between Banco Macro and Banco Latinoamericano

Considering the 90-day investment horizon Banco Macro SA is expected to under-perform the Banco Latinoamericano. In addition to that, Banco Macro is 1.83 times more volatile than Banco Latinoamericano DE. It trades about -0.02 of its total potential returns per unit of risk. Banco Latinoamericano DE is currently generating about 0.05 per unit of volatility. If you would invest  952.00  in Banco Latinoamericano DE on April 4, 2022 and sell it today you would earn a total of  398.00  from holding Banco Latinoamericano DE or generate 41.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Banco Macro SA  vs.  Banco Latinoamericano DE

 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

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 uncertain 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
0.0754
Payout Ratio
0.6
Forward Annual Dividend Rate
1.0
Dividend Date
2022-06-01
Ex Dividend Date
2022-05-13

Banco Price Channel

Banco Macro and Banco Latinoamericano Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Banco Macro and Banco Latinoamericano

The main advantage of trading using opposite Banco Macro and Banco Latinoamericano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, Banco Latinoamericano 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 Latinoamericano will offset losses from the drop in Banco Latinoamericano's long position.
The idea behind Banco Macro SA and Banco Latinoamericano DE 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go