Correlation Between SP 500 and BRADESCO

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SP 500 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 SP 500 and BRADESCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP 500 SPDR and BRADESCO PN EJ, you can compare the effects of market volatilities on SP 500 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 SP 500 with a short position of BRADESCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and BRADESCO.

Diversification Opportunities for SP 500 and BRADESCO

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between SP 500 and BRADESCO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 SPDR 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 SP 500 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 SP 500 SPDR 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 SP 500 i.e., SP 500 and BRADESCO go up and down completely randomly.

Pair Corralation between SP 500 and BRADESCO

Considering the 90-day investment horizon SP 500 SPDR is expected to under-perform the BRADESCO. In addition to that, SP 500 is 1.03 times more volatile than BRADESCO PN EJ. It trades about -0.07 of its total potential returns per unit of risk. BRADESCO PN EJ is currently generating about 0.18 per unit of volatility. If you would invest  1,713  in BRADESCO PN EJ on July 2, 2022 and sell it today you would earn a total of  271.00  from holding BRADESCO PN EJ or generate 15.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.44%
ValuesDaily Returns

SP 500 SPDR  vs.  BRADESCO PN EJ N1

 Performance (%) 
       Timeline  
SP 500 SPDR 
SP 500 Performance
0 of 100
Over the last 90 days SP 500 SPDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SP 500 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SP 500 Price Channel

BRADESCO PN EJ 
BRADESCO Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BRADESCO PN EJ are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BRADESCO reported solid returns over the last few months and may actually be approaching a breakup point.

BRADESCO Price Channel

SP 500 and BRADESCO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SP 500 and BRADESCO

The main advantage of trading using opposite SP 500 and BRADESCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 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.
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 SP 500 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. SP 500'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, SP 500'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 SP 500 SPDR.
The idea behind SP 500 SPDR 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 vs. QORVO INC DRN
BRADESCO vs. WIZ S A
BRADESCO vs. PORTO SEGUROON NM
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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
Transaction History
View history of all your transactions and understand their impact on performance
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go