Correlation Between Target and Ita Unibanco

Can any of the company-specific risk be diversified away by investing in both Target and Ita Unibanco 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 Target and Ita Unibanco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Target and Ita Unibanco Holding, you can compare the effects of market volatilities on Target and Ita Unibanco 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 Target with a short position of Ita Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Ita Unibanco.

Diversification Opportunities for Target and Ita Unibanco

0.0

Correlation Coefficient

Target  Ita Unibanco

Pay attention - limited upside

The 3 months correlation between Target and Ita is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Target and Ita Unibanco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ita Unibanco Holding and Target 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 Target are associated (or correlated) with Ita Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ita Unibanco Holding has no effect on the direction of Target i.e., Target and Ita Unibanco go up and down completely randomly.

Pair Corralation between Target and Ita Unibanco

If you would invest  3,373  in Ita Unibanco Holding on April 23, 2025 and sell it today you would earn a total of  175.00  from holding Ita Unibanco Holding or generate 5.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Target  vs.  Ita Unibanco Holding

Target

Risk-Adjusted Performance

Modest

Over the last 90 days Target has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Target is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ita Unibanco Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ita Unibanco Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ita Unibanco is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Target and Ita Unibanco

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

The idea behind Target and Ita Unibanco Holding 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.

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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 the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.