Correlation Between Banco Santander and Itau CorpBanca
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Itau CorpBanca 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 Itau CorpBanca 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 Itau CorpBanca ADR, you can compare the effects of market volatilities on Banco Santander and Itau CorpBanca 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 Itau CorpBanca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Itau CorpBanca.
Diversification Opportunities for Banco Santander and Itau CorpBanca
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Itau is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Itau CorpBanca ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau CorpBanca ADR 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 Itau CorpBanca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau CorpBanca ADR has no effect on the direction of Banco Santander i.e., Banco Santander and Itau CorpBanca go up and down completely randomly.
Pair Corralation between Banco Santander and Itau CorpBanca
If you would invest 342.00 in Itau CorpBanca ADR on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Itau CorpBanca ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.25% |
| Values | Daily Returns |
Banco Santander Brasil vs. Itau CorpBanca ADR
Performance |
| Timeline |
| Banco Santander Brasil |
| Itau CorpBanca ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Banco Santander and Itau CorpBanca Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Itau CorpBanca
The main advantage of trading using opposite Banco Santander and Itau CorpBanca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Itau CorpBanca 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 Itau CorpBanca will offset losses from the drop in Itau CorpBanca'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 |
| Itau CorpBanca vs. Banco De Chile | Itau CorpBanca vs. Banco Santander Brasil | Itau CorpBanca vs. CrossFirst Bankshares | Itau CorpBanca vs. Banco Bradesco SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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