Correlation Between Banco Santander and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Banco Bradesco 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 Banco Bradesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander Brasil and Banco Bradesco SA, you can compare the effects of market volatilities on Banco Santander and Banco Bradesco 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 Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Banco Bradesco.
Diversification Opportunities for Banco Santander and Banco Bradesco
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Banco and Banco is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Banco Bradesco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bradesco 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 Brasil are associated (or correlated) with Banco Bradesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bradesco SA has no effect on the direction of Banco Santander i.e., Banco Santander and Banco Bradesco go up and down completely randomly.
Pair Corralation between Banco Santander and Banco Bradesco
Given the investment horizon of 90 days Banco Santander Brasil is expected to under-perform the Banco Bradesco. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander Brasil is 1.24 times less risky than Banco Bradesco. The stock trades about -0.07 of its potential returns per unit of risk. The Banco Bradesco SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 304.00 in Banco Bradesco SA on August 24, 2024 and sell it today you would lose (65.00) from holding Banco Bradesco SA or give up 21.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Brasil vs. Banco Bradesco SA
Performance |
| Timeline |
| Banco Santander Brasil |
| Banco Bradesco SA |
Banco Santander and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Banco Bradesco
The main advantage of trading using opposite Banco Santander and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Banco Bradesco 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 Bradesco will offset losses from the drop in Banco Bradesco's long position.| Banco Santander vs. Banco De Chile | Banco Santander vs. CrossFirst Bankshares | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. CF Bankshares |
| Banco Bradesco vs. Banco Santander Brasil | Banco Bradesco vs. Banco Macro SA | Banco Bradesco vs. Lloyds Banking Group | Banco Bradesco vs. Grupo Financiero Galicia |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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