Correlation Between Affinity Bancshares and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares 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 Affinity Bancshares and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and Banco Santander Brasil, you can compare the effects of market volatilities on Affinity Bancshares 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 Affinity Bancshares with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Banco Santander.
Diversification Opportunities for Affinity Bancshares and Banco Santander
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Affinity and Banco is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and Banco Santander Brasil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Brasil and Affinity Bancshares 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 Affinity Bancshares 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 Brasil has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and Banco Santander go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Banco Santander
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 0.4 times more return on investment than Banco Santander. However, Affinity Bancshares is 2.51 times less risky than Banco Santander. It trades about 0.06 of its potential returns per unit of risk. Banco Santander Brasil is currently generating about -0.21 per unit of risk. If you would invest 2,139 in Affinity Bancshares on August 30, 2024 and sell it today you would earn a total of 23.00 from holding Affinity Bancshares or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity Bancshares vs. Banco Santander Brasil
Performance |
| Timeline |
| Affinity Bancshares |
| Banco Santander Brasil |
Affinity Bancshares and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Banco Santander
The main advantage of trading using opposite Affinity Bancshares and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares 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.| Affinity Bancshares vs. SVB T Corp | Affinity Bancshares vs. First Capital | Affinity Bancshares vs. Pioneer Bankcorp | Affinity Bancshares vs. Liberty Northwest Bancorp |
| Banco Santander vs. Banco De Chile | Banco Santander vs. CrossFirst Bankshares | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. CF Bankshares |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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