Correlation Between Banco Santander and Brpr Corporate

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

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

Diversification Opportunities for Banco Santander and Brpr Corporate

0.88

Correlation Coefficient

Banco Santander  Brpr Corporate

Very poor diversification

The 3 months correlation between Banco and Brpr is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Brpr Corporate Offices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brpr Corporate Offices 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 SA are associated (or correlated) with Brpr Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brpr Corporate Offices has no effect on the direction of Banco Santander i.e., Banco Santander and Brpr Corporate go up and down completely randomly.

Pair Corralation between Banco Santander and Brpr Corporate

Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.8 times more return on investment than Brpr Corporate. However, Banco Santander SA is 1.25 times less risky than Brpr Corporate. It trades about 0.17 of its potential returns per unit of risk. Brpr Corporate Offices is currently generating about 0.12 per unit of risk. If you would invest  1,112  in Banco Santander SA on December 30, 2024 and sell it today you would earn a total of  190.00  from holding Banco Santander SA or generate 17.09% return on investment over 90 days.

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

Banco Santander SA  vs.  Brpr Corporate Offices

Banco Santander SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Santander SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Banco Santander unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brpr Corporate Offices

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brpr Corporate Offices are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Brpr Corporate sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banco Santander and Brpr Corporate

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

The idea behind Banco Santander SA and Brpr Corporate Offices 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.