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
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Banco and Banco is 0.95. 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 is expected to generate 3.61 times less return on investment than Banco Bradesco. But when comparing it to its historical volatility, Banco Santander Brasil is 1.47 times less risky than Banco Bradesco. It trades about 0.01 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 215.00 in Banco Bradesco SA on August 27, 2024 and sell it today you would lose (1.00) from holding Banco Bradesco SA or give up 0.47% 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. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |