Correlation Between Banco Santander and Refinaria
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Refinaria 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 Refinaria 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 Refinaria de Petrleos, you can compare the effects of market volatilities on Banco Santander and Refinaria 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 Refinaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Refinaria.
Diversification Opportunities for Banco Santander and Refinaria
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banco and Refinaria is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos 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 Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of Banco Santander i.e., Banco Santander and Refinaria go up and down completely randomly.
Pair Corralation between Banco Santander and Refinaria
Assuming the 90 days trading horizon Banco Santander Chile is expected to generate 0.51 times more return on investment than Refinaria. However, Banco Santander Chile is 1.96 times less risky than Refinaria. It trades about -0.12 of its potential returns per unit of risk. Refinaria de Petrleos is currently generating about -0.3 per unit of risk. If you would invest 5,796 in Banco Santander Chile on August 30, 2024 and sell it today you would lose (206.00) from holding Banco Santander Chile or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Chile vs. Refinaria de Petrleos
Performance |
| Timeline |
| Banco Santander Chile |
| Refinaria de Petrleos |
Banco Santander and Refinaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Refinaria
The main advantage of trading using opposite Banco Santander and Refinaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Refinaria 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 Refinaria will offset losses from the drop in Refinaria's long position.| Banco Santander vs. Capital One Financial | Banco Santander vs. CM Hospitalar SA | Banco Santander vs. SVB Financial Group | Banco Santander vs. Ameriprise Financial |
| Refinaria vs. Petrleo Brasileiro SA | Refinaria vs. Banco Bradesco SA | Refinaria vs. Schlumberger Limited | Refinaria vs. Ita Unibanco Holding |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |