Correlation Between Grupo Financiero and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero 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 Grupo Financiero and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Financiero Galicia and Banco Santander Chile, you can compare the effects of market volatilities on Grupo Financiero 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 Grupo Financiero with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Banco Santander.
Diversification Opportunities for Grupo Financiero and Banco Santander
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and Banco is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia 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 Grupo Financiero 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 Grupo Financiero Galicia 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 Grupo Financiero i.e., Grupo Financiero and Banco Santander go up and down completely randomly.
Pair Corralation between Grupo Financiero and Banco Santander
Given the investment horizon of 90 days Grupo Financiero Galicia is expected to generate 2.24 times more return on investment than Banco Santander. However, Grupo Financiero is 2.24 times more volatile than Banco Santander Chile. It trades about 0.14 of its potential returns per unit of risk. Banco Santander Chile is currently generating about 0.05 per unit of risk. If you would invest 654.00 in Grupo Financiero Galicia on August 24, 2024 and sell it today you would earn a total of 4,939 from holding Grupo Financiero Galicia or generate 755.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Banco Santander Chile
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Banco Santander Chile |
Grupo Financiero and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Banco Santander
The main advantage of trading using opposite Grupo Financiero and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero 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.| Grupo Financiero vs. Grupo Supervielle SA | Grupo Financiero vs. BBVA Banco Frances | Grupo Financiero vs. Itau Unibanco Banco | Grupo Financiero vs. Banco Bradesco SA |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |