Correlation Between Regions Financial and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Regions Financial 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 Regions Financial and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Banco Santander Brasil, you can compare the effects of market volatilities on Regions Financial 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 Regions Financial with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Banco Santander.
Diversification Opportunities for Regions Financial and Banco Santander
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regions and Banco is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial 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 Regions Financial 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 Regions Financial 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 Regions Financial i.e., Regions Financial and Banco Santander go up and down completely randomly.
Pair Corralation between Regions Financial and Banco Santander
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.06 times more return on investment than Banco Santander. However, Regions Financial is 1.06 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 0.01 per unit of risk. If you would invest 1,967 in Regions Financial on August 27, 2024 and sell it today you would earn a total of 761.00 from holding Regions Financial or generate 38.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Banco Santander Brasil
Performance |
| Timeline |
| Regions Financial |
| Banco Santander Brasil |
Regions Financial and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Banco Santander
The main advantage of trading using opposite Regions Financial and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial 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.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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