Correlation Between Credit Suisse and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Banco Santander 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 Credit Suisse and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse Group and Banco Santander SA, you can compare the effects of market volatilities on Credit Suisse and Banco Santander 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 Credit Suisse with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Banco Santander.
Diversification Opportunities for Credit Suisse and Banco Santander
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Credit and Banco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Group and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Credit Suisse 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 Credit Suisse Group are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of Credit Suisse i.e., Credit Suisse and Banco Santander go up and down completely randomly.
Pair Corralation between Credit Suisse and Banco Santander
Allowing for the 90-day total investment horizon Credit Suisse Group is expected to under-perform the Banco Santander. In addition to that, Credit Suisse is 3.04 times more volatile than Banco Santander SA. It trades about -0.14 of its total potential returns per unit of risk. Banco Santander SA is currently generating about 0.07 per unit of volatility. If you would invest 271.00 in Banco Santander SA on August 23, 2024 and sell it today you would earn a total of 205.00 from holding Banco Santander SA or generate 75.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 26.81% |
| Values | Daily Returns |
Credit Suisse Group vs. Banco Santander SA
Performance |
| Timeline |
| Credit Suisse Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Banco Santander SA |
Credit Suisse and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Banco Santander
The main advantage of trading using opposite Credit Suisse and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Credit Suisse vs. Barclays PLC ADR | Credit Suisse vs. HSBC Holdings PLC | Credit Suisse vs. ING Group NV | Credit Suisse vs. Citigroup |
| Banco Santander vs. Barclays PLC ADR | Banco Santander vs. ING Group NV | Banco Santander vs. HSBC Holdings PLC | Banco Santander vs. Natwest Group PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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