Correlation Between Eastern Bankshares and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Eastern Bankshares 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 Eastern Bankshares and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Bankshares and Banco Santander Brasil, you can compare the effects of market volatilities on Eastern Bankshares 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 Eastern Bankshares with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Bankshares and Banco Santander.
Diversification Opportunities for Eastern Bankshares and Banco Santander
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastern and Banco is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Bankshares and Banco Santander Brasil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Brasil and Eastern Bankshares 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 Eastern Bankshares 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 Brasil has no effect on the direction of Eastern Bankshares i.e., Eastern Bankshares and Banco Santander go up and down completely randomly.
Pair Corralation between Eastern Bankshares and Banco Santander
Considering the 90-day investment horizon Eastern Bankshares is expected to generate 1.48 times more return on investment than Banco Santander. However, Eastern Bankshares is 1.48 times more volatile than Banco Santander Brasil. It trades about 0.21 of its potential returns per unit of risk. Banco Santander Brasil is currently generating about -0.27 per unit of risk. If you would invest 1,633 in Eastern Bankshares on September 1, 2024 and sell it today you would earn a total of 231.00 from holding Eastern Bankshares or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Bankshares vs. Banco Santander Brasil
Performance |
| Timeline |
| Eastern Bankshares |
| Banco Santander Brasil |
Eastern Bankshares and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Bankshares and Banco Santander
The main advantage of trading using opposite Eastern Bankshares and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Bankshares 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.| Eastern Bankshares vs. Western New England | Eastern Bankshares vs. Northeast Community Bancorp | Eastern Bankshares vs. Independent Bank | Eastern Bankshares vs. The First Bancshares, |
| Banco Santander vs. Banco De Chile | Banco Santander vs. CrossFirst Bankshares | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. CF Bankshares |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |