Correlation Between Banco Santander and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both Banco Santander and CrossFirst Bankshares 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 CrossFirst Bankshares 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 CrossFirst Bankshares, you can compare the effects of market volatilities on Banco Santander and CrossFirst Bankshares 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 CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and CrossFirst Bankshares.
Diversification Opportunities for Banco Santander and CrossFirst Bankshares
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banco and CrossFirst is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares 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 CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of Banco Santander i.e., Banco Santander and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between Banco Santander and CrossFirst Bankshares
Given the investment horizon of 90 days Banco Santander Brasil is expected to generate 1.38 times more return on investment than CrossFirst Bankshares. However, Banco Santander is 1.38 times more volatile than CrossFirst Bankshares. It trades about 0.19 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about -0.04 per unit of risk. If you would invest 385.00 in Banco Santander Brasil on October 20, 2024 and sell it today you would earn a total of 35.00 from holding Banco Santander Brasil or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Brasil vs. CrossFirst Bankshares
Performance |
| Timeline |
| Banco Santander Brasil |
| CrossFirst Bankshares |
Banco Santander and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and CrossFirst Bankshares
The main advantage of trading using opposite Banco Santander and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| Banco Santander vs. Banco De Chile | Banco Santander vs. CrossFirst Bankshares | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. CF Bankshares |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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