Correlation Between Banco Santander and First Mid
Can any of the company-specific risk be diversified away by investing in both Banco Santander and First Mid 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 First Mid 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 First Mid Illinois, you can compare the effects of market volatilities on Banco Santander and First Mid 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 First Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and First Mid.
Diversification Opportunities for Banco Santander and First Mid
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and First is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and First Mid Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mid Illinois 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 First Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mid Illinois has no effect on the direction of Banco Santander i.e., Banco Santander and First Mid go up and down completely randomly.
Pair Corralation between Banco Santander and First Mid
Given the investment horizon of 90 days Banco Santander Brasil is expected to generate 1.31 times more return on investment than First Mid. However, Banco Santander is 1.31 times more volatile than First Mid Illinois. It trades about 0.28 of its potential returns per unit of risk. First Mid Illinois is currently generating about 0.18 per unit of risk. If you would invest 420.00 in Banco Santander Brasil on November 18, 2024 and sell it today you would earn a total of 52.00 from holding Banco Santander Brasil or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Brasil vs. First Mid Illinois
Performance |
| Timeline |
| Banco Santander Brasil |
| First Mid Illinois |
Banco Santander and First Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and First Mid
The main advantage of trading using opposite Banco Santander and First Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, First Mid 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 First Mid will offset losses from the drop in First Mid'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 |
| First Mid vs. Finward Bancorp | First Mid vs. Great Southern Bancorp | First Mid vs. Franklin Financial Services | First Mid vs. Community West Bancshares |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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