Correlation Between Visa and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Banco Santander SA, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Banco Santander.
Diversification Opportunities for Visa and Banco Santander
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Banco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Visa 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 Visa Class A 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 SA has no effect on the direction of Visa i.e., Visa and Banco Santander go up and down completely randomly.
Pair Corralation between Visa and Banco Santander
Taking into account the 90-day investment horizon Visa is expected to generate 1.18 times less return on investment than Banco Santander. But when comparing it to its historical volatility, Visa Class A is 2.11 times less risky than Banco Santander. It trades about 0.29 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,318 in Banco Santander SA on November 29, 2024 and sell it today you would earn a total of 79.00 from holding Banco Santander SA or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Visa Class A vs. Banco Santander SA
Performance |
| Timeline |
| Visa Class A |
| Banco Santander SA |
Visa and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Banco Santander
The main advantage of trading using opposite Visa and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Banco Santander vs. Banco Santander SA | Banco Santander vs. Transmissora Aliana de | Banco Santander vs. Klabin SA | Banco Santander vs. CTEEP Companhia |
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
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |