Correlation Between Banco Santander and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Banco Santander and CDN IMPERIAL 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 CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander SA and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Banco Santander and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and CDN IMPERIAL.
Diversification Opportunities for Banco Santander and CDN IMPERIAL
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and CDN is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 SA are associated (or correlated) with CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of Banco Santander i.e., Banco Santander and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Banco Santander and CDN IMPERIAL
Assuming the 90 days trading horizon Banco Santander is expected to generate 4.88 times less return on investment than CDN IMPERIAL. In addition to that, Banco Santander is 2.05 times more volatile than CDN IMPERIAL BANK. It trades about 0.03 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.34 per unit of volatility. If you would invest 5,131 in CDN IMPERIAL BANK on September 3, 2024 and sell it today you would earn a total of 988.00 from holding CDN IMPERIAL BANK or generate 19.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Banco Santander SA |
| CDN IMPERIAL BANK |
Banco Santander and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and CDN IMPERIAL
The main advantage of trading using opposite Banco Santander and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| Banco Santander vs. TOTAL GABON | Banco Santander vs. Walgreens Boots Alliance | Banco Santander vs. Peak Resources Limited |
| CDN IMPERIAL vs. TOTAL GABON | CDN IMPERIAL vs. Walgreens Boots Alliance | CDN IMPERIAL vs. Banco Santander SA | CDN IMPERIAL vs. Peak Resources Limited |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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