Correlation Between Banco Santander and Aguas Andinas
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By analyzing existing cross correlation between Banco Santander Chile and Aguas Andinas SA, you can compare the effects of market volatilities on Banco Santander and Aguas Andinas 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 Aguas Andinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Aguas Andinas.
Diversification Opportunities for Banco Santander and Aguas Andinas
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Banco and Aguas is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Aguas Andinas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguas Andinas SA 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 Aguas Andinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguas Andinas SA has no effect on the direction of Banco Santander i.e., Banco Santander and Aguas Andinas go up and down completely randomly.
Pair Corralation between Banco Santander and Aguas Andinas
Assuming the 90 days trading horizon Banco Santander Chile is expected to generate 0.94 times more return on investment than Aguas Andinas. However, Banco Santander Chile is 1.07 times less risky than Aguas Andinas. It trades about 0.04 of its potential returns per unit of risk. Aguas Andinas SA is currently generating about -0.08 per unit of risk. If you would invest 4,710 in Banco Santander Chile on September 23, 2024 and sell it today you would earn a total of 30.00 from holding Banco Santander Chile or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Chile vs. Aguas Andinas SA
Performance |
| Timeline |
| Banco Santander Chile |
| Aguas Andinas SA |
Banco Santander and Aguas Andinas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Aguas Andinas
The main advantage of trading using opposite Banco Santander and Aguas Andinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Aguas Andinas 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 Aguas Andinas will offset losses from the drop in Aguas Andinas' long position.| Banco Santander vs. Banco de Chile | Banco Santander vs. Banco de Credito | Banco Santander vs. Cencosud | Banco Santander vs. Falabella |
| Aguas Andinas vs. Energia Latina SA | Aguas Andinas vs. Administradora Americana de | Aguas Andinas vs. Embotelladora Andina SA | Aguas Andinas vs. Salfacorp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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