Correlation Between Banco Santander and Cohen
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Cohen 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 Cohen 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 Cohen Company, you can compare the effects of market volatilities on Banco Santander and Cohen 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 Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Cohen.
Diversification Opportunities for Banco Santander and Cohen
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Cohen is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Cohen Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Company 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 Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Company has no effect on the direction of Banco Santander i.e., Banco Santander and Cohen go up and down completely randomly.
Pair Corralation between Banco Santander and Cohen
Given the investment horizon of 90 days Banco Santander Brasil is expected to under-perform the Cohen. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander Brasil is 1.38 times less risky than Cohen. The stock trades about -0.17 of its potential returns per unit of risk. The Cohen Company is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Cohen Company on September 19, 2024 and sell it today you would earn a total of 112.00 from holding Cohen Company or generate 11.58% 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. Cohen Company
Performance |
| Timeline |
| Banco Santander Brasil |
| Cohen Company |
Banco Santander and Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Cohen
The main advantage of trading using opposite Banco Santander and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Cohen 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 Cohen will offset losses from the drop in Cohen'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 |
| Cohen vs. Banco Bradesco SA | Cohen vs. Itau Unibanco Banco | Cohen vs. Banco Santander Brasil | Cohen vs. Western Alliance 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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