Correlation Between Banco Da and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Banco Da 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 Banco Da and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco da Amaznia and Banco Santander SA, you can compare the effects of market volatilities on Banco Da 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 Banco Da with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Da and Banco Santander.
Diversification Opportunities for Banco Da and Banco Santander
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Banco and Banco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Banco da Amaznia 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 Banco Da 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 da Amaznia 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 Banco Da i.e., Banco Da and Banco Santander go up and down completely randomly.
Pair Corralation between Banco Da and Banco Santander
Assuming the 90 days trading horizon Banco da Amaznia is expected to generate 1.16 times more return on investment than Banco Santander. However, Banco Da is 1.16 times more volatile than Banco Santander SA. It trades about 0.08 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.0 per unit of risk. If you would invest 4,523 in Banco da Amaznia on October 13, 2024 and sell it today you would earn a total of 4,056 from holding Banco da Amaznia or generate 89.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco da Amaznia vs. Banco Santander SA
Performance |
| Timeline |
| Banco da Amaznia |
| Banco Santander SA |
Banco Da and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Da and Banco Santander
The main advantage of trading using opposite Banco Da and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Da 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.| Banco Da vs. Banestes SA | Banco Da vs. Banco Mercantil do | Banco Da vs. Banco do Nordeste | Banco Da vs. Banco do Estado |
| Banco Santander vs. Banco Mercantil do | Banco Santander vs. Banestes SA | Banco Santander vs. Banco da Amaznia | Banco Santander vs. Banco Alfa de |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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