Correlation Between Banco Santander and MVB Financial
Can any of the company-specific risk be diversified away by investing in both Banco Santander and MVB Financial 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 MVB Financial 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 MVB Financial Corp, you can compare the effects of market volatilities on Banco Santander and MVB Financial 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 MVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and MVB Financial.
Diversification Opportunities for Banco Santander and MVB Financial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and MVB is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and MVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MVB Financial Corp 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 MVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MVB Financial Corp has no effect on the direction of Banco Santander i.e., Banco Santander and MVB Financial go up and down completely randomly.
Pair Corralation between Banco Santander and MVB Financial
Given the investment horizon of 90 days Banco Santander Chile is expected to under-perform the MVB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander Chile is 4.07 times less risky than MVB Financial. The stock trades about -0.12 of its potential returns per unit of risk. The MVB Financial Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,874 in MVB Financial Corp on September 4, 2024 and sell it today you would earn a total of 285.00 from holding MVB Financial Corp or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Chile vs. MVB Financial Corp
Performance |
| Timeline |
| Banco Santander Chile |
| MVB Financial Corp |
Banco Santander and MVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and MVB Financial
The main advantage of trading using opposite Banco Santander and MVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, MVB Financial 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 MVB Financial will offset losses from the drop in MVB Financial's long position.| Banco Santander vs. Bancolombia SA ADR | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. Credicorp | Banco Santander vs. Banco Santander Brasil |
| MVB Financial vs. Community West Bancshares | MVB Financial vs. First Financial Northwest | MVB Financial vs. CF Bankshares | MVB Financial vs. Home Federal Bancorp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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