Correlation Between Tectonic Financial and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Tectonic 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 Tectonic 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 Tectonic Financial PR and Banco Santander Chile, you can compare the effects of market volatilities on Tectonic 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 Tectonic Financial with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and Banco Santander.
Diversification Opportunities for Tectonic Financial and Banco Santander
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tectonic and Banco is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR 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 Tectonic 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 Tectonic Financial PR 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 Tectonic Financial i.e., Tectonic Financial and Banco Santander go up and down completely randomly.
Pair Corralation between Tectonic Financial and Banco Santander
Assuming the 90 days horizon Tectonic Financial PR is expected to generate 0.78 times more return on investment than Banco Santander. However, Tectonic Financial PR is 1.27 times less risky than Banco Santander. It trades about 0.09 of its potential returns per unit of risk. Banco Santander Chile is currently generating about -0.18 per unit of risk. If you would invest 1,016 in Tectonic Financial PR on August 24, 2024 and sell it today you would earn a total of 22.00 from holding Tectonic Financial PR or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. Banco Santander Chile
Performance |
| Timeline |
| Tectonic Financial |
| Banco Santander Chile |
Tectonic Financial and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and Banco Santander
The main advantage of trading using opposite Tectonic Financial and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic 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.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Absa Group Limited |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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