Correlation Between Banco Santander and Qualicorp Consultoria
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Qualicorp Consultoria 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 Qualicorp Consultoria 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 Qualicorp Consultoria e, you can compare the effects of market volatilities on Banco Santander and Qualicorp Consultoria 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 Qualicorp Consultoria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Qualicorp Consultoria.
Diversification Opportunities for Banco Santander and Qualicorp Consultoria
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Qualicorp is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Qualicorp Consultoria e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualicorp Consultoria 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 Qualicorp Consultoria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualicorp Consultoria has no effect on the direction of Banco Santander i.e., Banco Santander and Qualicorp Consultoria go up and down completely randomly.
Pair Corralation between Banco Santander and Qualicorp Consultoria
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.33 times more return on investment than Qualicorp Consultoria. However, Banco Santander SA is 3.03 times less risky than Qualicorp Consultoria. It trades about 0.06 of its potential returns per unit of risk. Qualicorp Consultoria e is currently generating about -0.12 per unit of risk. If you would invest 1,417 in Banco Santander SA on February 1, 2024 and sell it today you would earn a total of 118.00 from holding Banco Santander SA or generate 8.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Banco Santander SA vs. Qualicorp Consultoria e
Performance |
Timeline |
Banco Santander SA |
Qualicorp Consultoria |
Banco Santander and Qualicorp Consultoria Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Santander and Qualicorp Consultoria
The main advantage of trading using opposite Banco Santander and Qualicorp Consultoria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Qualicorp Consultoria 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 Qualicorp Consultoria will offset losses from the drop in Qualicorp Consultoria's long position.Banco Santander vs. Banco do Brasil | Banco Santander vs. Petrleo Brasileiro SA | Banco Santander vs. BB Seguridade Participacoes |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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