Correlation Between Triumph Financial and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Triumph 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 Triumph 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 Triumph Financial and Banco Santander Brasil, you can compare the effects of market volatilities on Triumph 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 Triumph Financial with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triumph Financial and Banco Santander.
Diversification Opportunities for Triumph Financial and Banco Santander
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Triumph and Banco is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Triumph 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 Triumph 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 Triumph 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 Triumph Financial i.e., Triumph Financial and Banco Santander go up and down completely randomly.
Pair Corralation between Triumph Financial and Banco Santander
Assuming the 90 days horizon Triumph Financial is expected to generate 0.83 times more return on investment than Banco Santander. However, Triumph Financial is 1.21 times less risky than Banco Santander. It trades about -0.23 of its potential returns per unit of risk. Banco Santander Brasil is currently generating about -0.34 per unit of risk. If you would invest 2,418 in Triumph Financial on August 24, 2024 and sell it today you would lose (168.00) from holding Triumph Financial or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Triumph Financial vs. Banco Santander Brasil
Performance |
| Timeline |
| Triumph Financial |
| Banco Santander Brasil |
Triumph Financial and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triumph Financial and Banco Santander
The main advantage of trading using opposite Triumph Financial and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph 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.| Triumph Financial vs. Banco Bradesco SA | Triumph Financial vs. Itau Unibanco Banco | Triumph Financial vs. Banco Santander Brasil | Triumph Financial vs. Western Alliance Bancorporation |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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