Correlation Between Banco Santander and Comerica
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Comerica 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 Comerica 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 Comerica, you can compare the effects of market volatilities on Banco Santander and Comerica 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 Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Comerica.
Diversification Opportunities for Banco Santander and Comerica
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Comerica is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica 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 Comerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comerica has no effect on the direction of Banco Santander i.e., Banco Santander and Comerica go up and down completely randomly.
Pair Corralation between Banco Santander and Comerica
Given the investment horizon of 90 days Banco Santander is expected to generate 8.45 times less return on investment than Comerica. But when comparing it to its historical volatility, Banco Santander Brasil is 1.66 times less risky than Comerica. It trades about 0.01 of its potential returns per unit of risk. Comerica is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,833 in Comerica on August 28, 2024 and sell it today you would earn a total of 1,440 from holding Comerica or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Brasil vs. Comerica
Performance |
| Timeline |
| Banco Santander Brasil |
| Comerica |
Banco Santander and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Comerica
The main advantage of trading using opposite Banco Santander and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Comerica 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 Comerica will offset losses from the drop in Comerica'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 |
| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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