Correlation Between Banco Santander and Refinaria

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Refinaria 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 Refinaria 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 Refinaria de Petrleos, you can compare the effects of market volatilities on Banco Santander and Refinaria 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 Refinaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Refinaria.

Diversification Opportunities for Banco Santander and Refinaria

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Banco and Refinaria is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos 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 Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of Banco Santander i.e., Banco Santander and Refinaria go up and down completely randomly.

Pair Corralation between Banco Santander and Refinaria

Assuming the 90 days trading horizon Banco Santander SA is expected to under-perform the Refinaria. But the preferred stock apears to be less risky and, when comparing its historical volatility, Banco Santander SA is 2.18 times less risky than Refinaria. The preferred stock trades about -0.15 of its potential returns per unit of risk. The Refinaria de Petrleos is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  244.00  in Refinaria de Petrleos on September 29, 2024 and sell it today you would earn a total of  12.00  from holding Refinaria de Petrleos or generate 4.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Banco Santander SA  vs.  Refinaria de Petrleos

 Performance 
       Timeline  
Banco Santander SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Banco Santander SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Refinaria de Petrleos 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Refinaria de Petrleos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Banco Santander and Refinaria Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Banco Santander and Refinaria

The main advantage of trading using opposite Banco Santander and Refinaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Refinaria 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 Refinaria will offset losses from the drop in Refinaria's long position.
The idea behind Banco Santander SA and Refinaria de Petrleos 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

Equity Valuation
Check real value of public entities based on technical and fundamental data
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation