Correlation Between Banco Santander and LINKBANCORP

Can any of the company-specific risk be diversified away by investing in both Banco Santander and LINKBANCORP 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 LINKBANCORP 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 LINKBANCORP, you can compare the effects of market volatilities on Banco Santander and LINKBANCORP 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 LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and LINKBANCORP.

Diversification Opportunities for Banco Santander and LINKBANCORP

-0.72

Correlation Coefficient

Banco Santander  LINKBANCORP

Pay attention - limited upside

The 3 months correlation between Banco and LINKBANCORP is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP 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 LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Banco Santander i.e., Banco Santander and LINKBANCORP go up and down completely randomly.

Pair Corralation between Banco Santander and LINKBANCORP

Given the investment horizon of 90 days Banco Santander Chile is expected to under-perform the LINKBANCORP. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander Chile is 1.53 times less risky than LINKBANCORP. The stock trades about -0.07 of its potential returns per unit of risk. The LINKBANCORP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  609.00  in LINKBANCORP on September 5, 2024 and sell it today you would earn a total of  145.00  from holding LINKBANCORP or generate 23.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Banco Santander Chile  vs.  LINKBANCORP

Banco Santander Chile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Santander Chile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Banco Santander is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

LINKBANCORP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward-looking signals, LINKBANCORP sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banco Santander and LINKBANCORP

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

The idea behind Banco Santander Chile and LINKBANCORP 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.