Correlation Between Eagle Bancorp and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp 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 Eagle Bancorp and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and Banco Santander Chile, you can compare the effects of market volatilities on Eagle Bancorp 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 Eagle Bancorp with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Banco Santander.
Diversification Opportunities for Eagle Bancorp and Banco Santander
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and Banco is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Banco Santander Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Chile and Eagle Bancorp 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 Eagle Bancorp 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 Chile has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Banco Santander go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Banco Santander
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 2.5 times more return on investment than Banco Santander. However, Eagle Bancorp is 2.5 times more volatile than Banco Santander Chile. It trades about 0.17 of its potential returns per unit of risk. Banco Santander Chile is currently generating about -0.27 per unit of risk. If you would invest 2,662 in Eagle Bancorp on August 28, 2024 and sell it today you would earn a total of 338.00 from holding Eagle Bancorp or generate 12.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp vs. Banco Santander Chile
Performance |
| Timeline |
| Eagle Bancorp |
| Banco Santander Chile |
Eagle Bancorp and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Banco Santander
The main advantage of trading using opposite Eagle Bancorp and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp 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.| Eagle Bancorp vs. Fifth Third Bancorp | Eagle Bancorp vs. Zions Bancorporation | Eagle Bancorp vs. Huntington Bancshares Incorporated | Eagle Bancorp vs. Comerica |
| Banco Santander vs. Bancolombia SA ADR | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. Credicorp | Banco Santander vs. Banco Santander Brasil |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |