Correlation Between Fidelity National and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Banco Santander Chile, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Banco Santander.
Diversification Opportunities for Fidelity National and Banco Santander
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Banco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information 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 Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Banco Santander go up and down completely randomly.
Pair Corralation between Fidelity National and Banco Santander
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 0.82 times more return on investment than Banco Santander. However, Fidelity National Information is 1.21 times less risky than Banco Santander. It trades about 0.15 of its potential returns per unit of risk. Banco Santander Chile is currently generating about 0.09 per unit of risk. If you would invest 2,551 in Fidelity National Information on September 14, 2024 and sell it today you would earn a total of 629.00 from holding Fidelity National Information or generate 24.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Banco Santander Chile
Performance |
| Timeline |
| Fidelity National |
| Banco Santander Chile |
Fidelity National and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Banco Santander
The main advantage of trading using opposite Fidelity National and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.| Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. Fundo Investimento Imobiliario | Fidelity National vs. LESTE FDO INV | Fidelity National vs. Fras le SA |
| Banco Santander vs. Cognizant Technology Solutions | Banco Santander vs. Southwest Airlines Co | Banco Santander vs. Take Two Interactive Software | Banco Santander vs. Tres Tentos Agroindustrial |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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