Correlation Between Banco Santander and Finwise Bancorp
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Finwise Bancorp 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 Finwise Bancorp 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 Finwise Bancorp, you can compare the effects of market volatilities on Banco Santander and Finwise Bancorp 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 Finwise Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Finwise Bancorp.
Diversification Opportunities for Banco Santander and Finwise Bancorp
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and Finwise is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Finwise Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finwise Bancorp 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 Finwise Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finwise Bancorp has no effect on the direction of Banco Santander i.e., Banco Santander and Finwise Bancorp go up and down completely randomly.
Pair Corralation between Banco Santander and Finwise Bancorp
Given the investment horizon of 90 days Banco Santander Brasil is expected to under-perform the Finwise Bancorp. In addition to that, Banco Santander is 1.19 times more volatile than Finwise Bancorp. It trades about -0.34 of its total potential returns per unit of risk. Finwise Bancorp is currently generating about 0.31 per unit of volatility. If you would invest 1,614 in Finwise Bancorp on August 24, 2024 and sell it today you would earn a total of 159.00 from holding Finwise Bancorp or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Banco Santander Brasil vs. Finwise Bancorp
Performance |
| Timeline |
| Banco Santander Brasil |
| Finwise Bancorp |
Banco Santander and Finwise Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Finwise Bancorp
The main advantage of trading using opposite Banco Santander and Finwise Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Finwise Bancorp 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 Finwise Bancorp will offset losses from the drop in Finwise Bancorp'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 |
| Finwise Bancorp vs. Home Federal Bancorp | Finwise Bancorp vs. First Financial Northwest | Finwise Bancorp vs. First Northwest Bancorp | Finwise Bancorp vs. First Capital |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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