Correlation Between Banco Bradesco and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Banco Santander 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 Bradesco and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bradesco SA and Banco Santander Chile, you can compare the effects of market volatilities on Banco Bradesco and Banco Santander 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 Bradesco with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Banco Santander.
Diversification Opportunities for Banco Bradesco and Banco Santander
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Banco and Banco is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Banco Santander Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Chile and Banco Bradesco 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 Bradesco SA are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander Chile has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Banco Santander go up and down completely randomly.
Pair Corralation between Banco Bradesco and Banco Santander
Considering the 90-day investment horizon Banco Bradesco SA is expected to under-perform the Banco Santander. But the stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco SA is 1.08 times less risky than Banco Santander. The stock trades about -0.25 of its potential returns per unit of risk. The Banco Santander Chile is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 1,941 in Banco Santander Chile on February 6, 2024 and sell it today you would lose (126.00) from holding Banco Santander Chile or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Banco Santander Chile
Performance |
| Timeline |
| Banco Bradesco SA |
| Banco Santander Chile |
Banco Bradesco and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Banco Santander
The main advantage of trading using opposite Banco Bradesco and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Banco Bradesco vs. Woori Financial Group | Banco Bradesco vs. Korea Electric Power | Banco Bradesco vs. Orix Corp Ads | Banco Bradesco vs. SK Telecom Co |
| Banco Santander vs. Woori Financial Group | Banco Santander vs. Korea Electric Power | Banco Santander vs. Orix Corp Ads | Banco Santander vs. SK Telecom Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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