Correlation Between Postal Svgs and BRADESCO

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

Diversification Opportunities for Postal Svgs and BRADESCO

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Postal and BRADESCO is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Postal Svgs Bk and BRADESCO PN EJ N1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRADESCO PN EJ and Postal Svgs 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 Postal Svgs Bk are associated (or correlated) with BRADESCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRADESCO PN EJ has no effect on the direction of Postal Svgs i.e., Postal Svgs and BRADESCO go up and down completely randomly.

Pair Corralation between Postal Svgs and BRADESCO

Assuming the 90 days horizon Postal Svgs Bk is expected to generate 1.21 times more return on investment than BRADESCO. However, Postal Svgs is 1.21 times more volatile than BRADESCO PN EJ. It trades about 0.08 of its potential returns per unit of risk. BRADESCO PN EJ is currently generating about -0.04 per unit of risk. If you would invest  1,453  in Postal Svgs Bk on April 2, 2022 and sell it today you would earn a total of  82.00  from holding Postal Svgs Bk or generate 5.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Postal Svgs Bk  vs.  BRADESCO PN EJ N1

 Performance (%) 
      Timeline 
Postal Svgs Bk 
Postal Performance
0 of 100
Over the last 90 days Postal Svgs Bk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Postal Svgs is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0525
Payout Ratio
0.75
Forward Annual Dividend Rate
0.77
Dividend Date
2022-08-24
Ex Dividend Date
2022-06-30

Postal Price Channel

BRADESCO PN EJ 
BRADESCO Performance
0 of 100
Over the last 90 days BRADESCO PN EJ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

BRADESCO Price Channel

Postal Svgs and BRADESCO Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Postal Svgs and BRADESCO

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

Postal Svgs Bk

Pair trading matchups for Postal Svgs

The idea behind Postal Svgs Bk and BRADESCO PN EJ 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.

BRADESCO PN EJ

Pair trading matchups for BRADESCO

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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