Correlation Between Banco Santander and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Citizens 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 Citizens Financial 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 Citizens Financial Group,, you can compare the effects of market volatilities on Banco Santander and Citizens 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 Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Citizens Financial.
Diversification Opportunities for Banco Santander and Citizens Financial
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Citizens is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Banco Santander i.e., Banco Santander and Citizens Financial go up and down completely randomly.
Pair Corralation between Banco Santander and Citizens Financial
Given the investment horizon of 90 days Banco Santander Brasil is expected to under-perform the Citizens Financial. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander Brasil is 1.79 times less risky than Citizens Financial. The stock trades about -0.26 of its potential returns per unit of risk. The Citizens Financial Group, is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,232 in Citizens Financial Group, on August 27, 2024 and sell it today you would earn a total of 533.00 from holding Citizens Financial Group, or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Brasil vs. Citizens Financial Group,
Performance |
| Timeline |
| Banco Santander Brasil |
| Citizens Financial Group, |
Banco Santander and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Citizens Financial
The main advantage of trading using opposite Banco Santander and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Citizens 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 Citizens Financial will offset losses from the drop in Citizens Financial'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 |
| Citizens Financial vs. Fifth Third Bancorp | Citizens Financial vs. Zions Bancorporation | Citizens Financial vs. Huntington Bancshares Incorporated | Citizens Financial vs. PNC Financial Services |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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