Correlation Between Credit Suisse and Banco Santander

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

By analyzing existing cross correlation between Credit Suisse Group and Banco Santander SA, you can compare the effects of market volatilities on Credit Suisse 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 Credit Suisse with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Banco Santander.

Diversification Opportunities for Credit Suisse and Banco Santander

-0.38

Correlation Coefficient

Credit Suisse  Banco Santander

Very good diversification

The 3 months correlation between Credit and Banco is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse Group and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Credit Suisse 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 Credit Suisse Group 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 SA has no effect on the direction of Credit Suisse i.e., Credit Suisse and Banco Santander go up and down completely randomly.

Pair Corralation between Credit Suisse and Banco Santander

If you would invest  481.00  in Banco Santander SA on February 3, 2024 and sell it today you would earn a total of  6.00  from holding Banco Santander SA or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

Credit Suisse Group  vs.  Banco Santander SA

Credit Suisse Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Suisse Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Credit Suisse is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Banco Santander SA

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Santander SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Banco Santander displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Credit Suisse and Banco Santander

The main advantage of trading using opposite Credit Suisse and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse 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.

The idea behind Credit Suisse Group and Banco Santander SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.