Correlation Between Banco Santander and Hancock Whitney

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

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

Diversification Opportunities for Banco Santander and Hancock Whitney

0.56

Correlation Coefficient

Banco Santander  Hancock Whitney

Very weak diversification

The 3 months correlation between Banco and Hancock is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney Corp 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 Chile are associated (or correlated) with Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of Banco Santander i.e., Banco Santander and Hancock Whitney go up and down completely randomly.

Pair Corralation between Banco Santander and Hancock Whitney

Given the investment horizon of 90 days Banco Santander Chile is expected to generate 0.99 times more return on investment than Hancock Whitney. However, Banco Santander Chile is 1.01 times less risky than Hancock Whitney. It trades about 0.09 of its potential returns per unit of risk. Hancock Whitney Corp is currently generating about -0.13 per unit of risk. If you would invest  2,051  in Banco Santander Chile on June 30, 2024 and sell it today you would earn a total of  53.00  from holding Banco Santander Chile or generate 2.58% return on investment over 90 days.

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

Banco Santander Chile  vs.  Hancock Whitney Corp

Banco Santander Chile

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Santander Chile are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Banco Santander exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hancock Whitney Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hancock Whitney Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Hancock Whitney may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pair Trading with Banco Santander and Hancock Whitney

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

The idea behind Banco Santander Chile and Hancock Whitney Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.