Correlation Between American Express and Banco Santander
Can any of the company-specific risk be diversified away by investing in both American Express 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 American Express and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express Co and Banco Santander Ro, you can compare the effects of market volatilities on American Express 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 American Express with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Banco Santander.
Diversification Opportunities for American Express and Banco Santander
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Banco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Express Co and Banco Santander Ro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Ro and American Express 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 American Express Co 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 Ro has no effect on the direction of American Express i.e., American Express and Banco Santander go up and down completely randomly.
Pair Corralation between American Express and Banco Santander
If you would invest 2,257,500 in American Express Co on October 20, 2024 and sell it today you would earn a total of 215,000 from holding American Express Co or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
American Express Co vs. Banco Santander Ro
Performance |
| Timeline |
| American Express |
| Banco Santander Ro |
American Express and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Banco Santander
The main advantage of trading using opposite American Express and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express 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.| American Express vs. United States Steel | American Express vs. Agrometal SAI | American Express vs. Telecom Argentina | American Express vs. Compania de Transporte |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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