Correlation Between Banco Santander and Cielo SA
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Cielo SA 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 Cielo SA 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 Cielo SA, you can compare the effects of market volatilities on Banco Santander and Cielo SA 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 Cielo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Cielo SA.
Diversification Opportunities for Banco Santander and Cielo SA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Cielo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Cielo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cielo 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 Cielo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cielo SA has no effect on the direction of Banco Santander i.e., Banco Santander and Cielo SA go up and down completely randomly.
Pair Corralation between Banco Santander and Cielo SA
Given the investment horizon of 90 days Banco Santander is expected to generate 7.83 times less return on investment than Cielo SA. But when comparing it to its historical volatility, Banco Santander Brasil is 1.91 times less risky than Cielo SA. It trades about 0.01 of its potential returns per unit of risk. Cielo SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Cielo SA on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Cielo SA or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.9% |
| Values | Daily Returns |
Banco Santander Brasil vs. Cielo SA
Performance |
| Timeline |
| Banco Santander Brasil |
| Cielo SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Banco Santander and Cielo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Cielo SA
The main advantage of trading using opposite Banco Santander and Cielo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Cielo SA 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 Cielo SA will offset losses from the drop in Cielo SA'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 |
| Cielo SA vs. CCC Intelligent Solutions | Cielo SA vs. Endava | Cielo SA vs. authID Inc | Cielo SA vs. EverCommerce |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |