Correlation Between Banco Santander and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Banco Santander and JB Hunt 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 Banco Santander and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander Chile and JB Hunt Transport, you can compare the effects of market volatilities on Banco Santander and JB Hunt 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 Banco Santander with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and JB Hunt.
Diversification Opportunities for Banco Santander and JB Hunt
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and J1BH34 is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and JB Hunt Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hunt Transport and Banco Santander 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 Banco Santander Chile are associated (or correlated) with JB Hunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hunt Transport has no effect on the direction of Banco Santander i.e., Banco Santander and JB Hunt go up and down completely randomly.
Pair Corralation between Banco Santander and JB Hunt
Assuming the 90 days trading horizon Banco Santander Chile is expected to generate 1.46 times more return on investment than JB Hunt. However, Banco Santander is 1.46 times more volatile than JB Hunt Transport. It trades about 0.06 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.01 per unit of risk. If you would invest 3,773 in Banco Santander Chile on October 11, 2024 and sell it today you would earn a total of 1,919 from holding Banco Santander Chile or generate 50.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Banco Santander Chile vs. JB Hunt Transport
Performance |
| Timeline |
| Banco Santander Chile |
| JB Hunt Transport |
Banco Santander and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and JB Hunt
The main advantage of trading using opposite Banco Santander and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, JB Hunt 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 JB Hunt will offset losses from the drop in JB Hunt's long position.| Banco Santander vs. Air Products and | Banco Santander vs. Molson Coors Beverage | Banco Santander vs. Telecomunicaes Brasileiras SA | Banco Santander vs. Ryanair Holdings plc |
| JB Hunt vs. CVS Health | JB Hunt vs. Universal Health Services, | JB Hunt vs. Omega Healthcare Investors, | JB Hunt vs. Martin Marietta Materials, |
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 CEOs Directory module to screen CEOs from public companies around the world.
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