Correlation Between VersaBank and Banco Santander
Can any of the company-specific risk be diversified away by investing in both VersaBank 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 VersaBank and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and Banco Santander Chile, you can compare the effects of market volatilities on VersaBank 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 VersaBank with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and Banco Santander.
Diversification Opportunities for VersaBank and Banco Santander
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VersaBank and Banco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank 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 VersaBank 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 VersaBank 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 VersaBank i.e., VersaBank and Banco Santander go up and down completely randomly.
Pair Corralation between VersaBank and Banco Santander
Given the investment horizon of 90 days VersaBank is expected to generate 1.53 times more return on investment than Banco Santander. However, VersaBank is 1.53 times more volatile than Banco Santander Chile. It trades about 0.4 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 1,424 in VersaBank on August 24, 2024 and sell it today you would earn a total of 286.00 from holding VersaBank or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
VersaBank vs. Banco Santander Chile
Performance |
| Timeline |
| VersaBank |
| Banco Santander Chile |
VersaBank and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and Banco Santander
The main advantage of trading using opposite VersaBank and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank 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.| VersaBank vs. Banco Bradesco SA | VersaBank vs. Itau Unibanco Banco | VersaBank vs. Banco Santander Brasil | VersaBank vs. Western Alliance Bancorporation |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |