Correlation Between Agricultural Bank and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Agricultural Bank and Banco Santander 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 Agricultural Bank and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agricultural Bank and Banco Santander SA, you can compare the effects of market volatilities on Agricultural Bank and Banco Santander 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 Agricultural Bank with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Banco Santander.
Diversification Opportunities for Agricultural Bank and Banco Santander
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agricultural and Banco is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Agricultural Bank 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 Agricultural Bank are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Banco Santander go up and down completely randomly.
Pair Corralation between Agricultural Bank and Banco Santander
Assuming the 90 days horizon Agricultural Bank is expected to under-perform the Banco Santander. But the pink sheet apears to be less risky and, when comparing its historical volatility, Agricultural Bank is 2.75 times less risky than Banco Santander. The pink sheet trades about -0.35 of its potential returns per unit of risk. The Banco Santander SA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Banco Santander SA on August 30, 2024 and sell it today you would lose (55.00) from holding Banco Santander SA or give up 11.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Agricultural Bank vs. Banco Santander SA
Performance |
| Timeline |
| Agricultural Bank |
| Banco Santander SA |
Agricultural Bank and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Banco Santander
The main advantage of trading using opposite Agricultural Bank and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Banco Santander 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 Santander will offset losses from the drop in Banco Santander's long position.| Agricultural Bank vs. China Construction Bank | Agricultural Bank vs. National Australia Bank | Agricultural Bank vs. Svenska Handelsbanken AB | Agricultural Bank vs. Bank of America |
| Banco Santander vs. ANZ Group Holdings | Banco Santander vs. National Australia Bank | Banco Santander vs. Agricultural Bank | Banco Santander vs. Industrial and Commercial |
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 the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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