Correlation Between Finwise Bancorp and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Finwise 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 Finwise 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 Finwise Bancorp and Banco Santander Brasil, you can compare the effects of market volatilities on Finwise 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 Finwise Bancorp with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finwise Bancorp and Banco Santander.
Diversification Opportunities for Finwise Bancorp and Banco Santander
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finwise and Banco is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Finwise Bancorp 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 Finwise 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 Finwise 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 Brasil has no effect on the direction of Finwise Bancorp i.e., Finwise Bancorp and Banco Santander go up and down completely randomly.
Pair Corralation between Finwise Bancorp and Banco Santander
Given the investment horizon of 90 days Finwise Bancorp is expected to generate 1.03 times more return on investment than Banco Santander. However, Finwise Bancorp is 1.03 times more volatile than Banco Santander Brasil. It trades about 0.04 of its potential returns per unit of risk. Banco Santander Brasil is currently generating about -0.1 per unit of risk. If you would invest 1,606 in Finwise Bancorp on October 25, 2024 and sell it today you would earn a total of 57.00 from holding Finwise Bancorp or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finwise Bancorp vs. Banco Santander Brasil
Performance |
| Timeline |
| Finwise Bancorp |
| Banco Santander Brasil |
Finwise Bancorp and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finwise Bancorp and Banco Santander
The main advantage of trading using opposite Finwise Bancorp and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finwise 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.| Finwise Bancorp vs. Home Federal Bancorp | Finwise Bancorp vs. First Financial Northwest | Finwise Bancorp vs. First Northwest Bancorp | Finwise Bancorp vs. First Capital |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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