Correlation Between Banco Santander and Compania

Can any of the company-specific risk be diversified away by investing in both Banco Santander and Compania 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 Compania into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banco Santander Ro and Compania de Transporte, you can compare the effects of market volatilities on Banco Santander and Compania 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 Compania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Compania.

Diversification Opportunities for Banco Santander and Compania

0.0

Correlation Coefficient

Banco Santander  Compania

Pay attention - limited upside

The 3 months correlation between Banco and Compania is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Ro and Compania de Transporte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Transporte 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 Ro are associated (or correlated) with Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Transporte has no effect on the direction of Banco Santander i.e., Banco Santander and Compania go up and down completely randomly.

Pair Corralation between Banco Santander and Compania

If you would invest  3,350  in Banco Santander Ro on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Banco Santander Ro or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Banco Santander Ro  vs.  Compania de Transporte

Banco Santander Ro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Santander Ro has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Banco Santander is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Compania de Transporte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compania de Transporte has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Banco Santander and Compania

The main advantage of trading using opposite Banco Santander and Compania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Compania 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 Compania will offset losses from the drop in Compania's long position.

The idea behind Banco Santander Ro and Compania de Transporte pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.