Correlation Between Santander Bank and REGIONS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Santander Bank and REGIONS FINANCIAL 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 Santander Bank and REGIONS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santander Bank Polska and REGIONS FINANCIAL PFD, you can compare the effects of market volatilities on Santander Bank and REGIONS FINANCIAL 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 Santander Bank with a short position of REGIONS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and REGIONS FINANCIAL.
Diversification Opportunities for Santander Bank and REGIONS FINANCIAL
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santander and REGIONS is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and REGIONS FINANCIAL PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGIONS FINANCIAL PFD and Santander Bank 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 Santander Bank Polska are associated (or correlated) with REGIONS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGIONS FINANCIAL PFD has no effect on the direction of Santander Bank i.e., Santander Bank and REGIONS FINANCIAL go up and down completely randomly.
Pair Corralation between Santander Bank and REGIONS FINANCIAL
Assuming the 90 days horizon Santander Bank is expected to generate 1.12 times less return on investment than REGIONS FINANCIAL. In addition to that, Santander Bank is 1.07 times more volatile than REGIONS FINANCIAL PFD. It trades about 0.07 of its total potential returns per unit of risk. REGIONS FINANCIAL PFD is currently generating about 0.09 per unit of volatility. If you would invest 1,700 in REGIONS FINANCIAL PFD on October 21, 2024 and sell it today you would earn a total of 40.00 from holding REGIONS FINANCIAL PFD or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. REGIONS FINANCIAL PFD
Performance |
| Timeline |
| Santander Bank Polska |
| REGIONS FINANCIAL PFD |
Santander Bank and REGIONS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and REGIONS FINANCIAL
The main advantage of trading using opposite Santander Bank and REGIONS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, REGIONS FINANCIAL 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 REGIONS FINANCIAL will offset losses from the drop in REGIONS FINANCIAL's long position.| Santander Bank vs. BNP Paribas SA | Santander Bank vs. DNB BANK ASA | Santander Bank vs. Deutsche Bank Aktiengesellschaft | Santander Bank vs. Socit Gnrale Socit |
| REGIONS FINANCIAL vs. Caseys General Stores | REGIONS FINANCIAL vs. Aristocrat Leisure Limited | REGIONS FINANCIAL vs. MARKET VECTR RETAIL | REGIONS FINANCIAL vs. NorAm Drilling AS |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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