Correlation Between Banco Santander and Huntington Bancshares

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

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

Diversification Opportunities for Banco Santander and Huntington Bancshares

-0.87

Correlation Coefficient

Banco Santander  Huntington Bancshares

Pay attention - limited upside

The 3 months correlation between Banco and Huntington is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares 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 Brasil are associated (or correlated) with Huntington Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Bancshares has no effect on the direction of Banco Santander i.e., Banco Santander and Huntington Bancshares go up and down completely randomly.

Pair Corralation between Banco Santander and Huntington Bancshares

Given the investment horizon of 90 days Banco Santander Brasil is expected to under-perform the Huntington Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander Brasil is 1.07 times less risky than Huntington Bancshares. The stock trades about -0.02 of its potential returns per unit of risk. The Huntington Bancshares Incorporated is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,281  in Huntington Bancshares Incorporated on September 19, 2024 and sell it today you would earn a total of  310.00  from holding Huntington Bancshares Incorporated or generate 24.2% return on investment over 90 days.

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

Banco Santander Brasil  vs.  Huntington Bancshares Incorpor

Banco Santander Brasil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Santander Brasil has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Huntington Bancshares

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Bancshares Incorporated are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Huntington Bancshares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Banco Santander and Huntington Bancshares

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

The idea behind Banco Santander Brasil and Huntington Bancshares Incorporated 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 CEOs Directory module to screen CEOs from public companies around the world.