Correlation Between Banco Santander and Ita Unibanco
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Ita Unibanco 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 Banco Santander and Ita Unibanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander Chile and Ita Unibanco Holding, you can compare the effects of market volatilities on Banco Santander and Ita Unibanco 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 Banco Santander with a short position of Ita Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Ita Unibanco.
Diversification Opportunities for Banco Santander and Ita Unibanco
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Ita is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Ita Unibanco Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ita Unibanco Holding and Banco Santander 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 Banco Santander Chile are associated (or correlated) with Ita Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ita Unibanco Holding has no effect on the direction of Banco Santander i.e., Banco Santander and Ita Unibanco go up and down completely randomly.
Pair Corralation between Banco Santander and Ita Unibanco
Assuming the 90 days trading horizon Banco Santander Chile is expected to generate 1.22 times more return on investment than Ita Unibanco. However, Banco Santander is 1.22 times more volatile than Ita Unibanco Holding. It trades about 0.06 of its potential returns per unit of risk. Ita Unibanco Holding is currently generating about 0.07 per unit of risk. If you would invest 3,928 in Banco Santander Chile on September 23, 2024 and sell it today you would earn a total of 1,856 from holding Banco Santander Chile or generate 47.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.0% |
Values | Daily Returns |
Banco Santander Chile vs. Ita Unibanco Holding
Performance |
Timeline |
Banco Santander Chile |
Ita Unibanco Holding |
Banco Santander and Ita Unibanco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Santander and Ita Unibanco
The main advantage of trading using opposite Banco Santander and Ita Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Ita Unibanco 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 Ita Unibanco will offset losses from the drop in Ita Unibanco's long position.Banco Santander vs. Lloyds Banking Group | Banco Santander vs. KeyCorp | Banco Santander vs. Karsten SA | Banco Santander vs. Recrusul SA |
Ita Unibanco vs. Toyota Motor | Ita Unibanco vs. Taiwan Semiconductor Manufacturing | Ita Unibanco vs. Sony Group | Ita Unibanco vs. Banco Santander Chile |
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 CEOs Directory module to screen CEOs from public companies around the world.
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