Correlation Between Banco Santander and BayCom Corp
Can any of the company-specific risk be diversified away by investing in both Banco Santander and BayCom Corp 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 BayCom Corp 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 BayCom Corp, you can compare the effects of market volatilities on Banco Santander and BayCom Corp 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 BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and BayCom Corp.
Diversification Opportunities for Banco Santander and BayCom Corp
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and BayCom is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom 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 BayCom Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BayCom Corp has no effect on the direction of Banco Santander i.e., Banco Santander and BayCom Corp go up and down completely randomly.
Pair Corralation between Banco Santander and BayCom Corp
Given the investment horizon of 90 days Banco Santander Chile is expected to under-perform the BayCom Corp. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander Chile is 1.37 times less risky than BayCom Corp. The stock trades about -0.04 of its potential returns per unit of risk. The BayCom Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,317 in BayCom Corp on September 13, 2024 and sell it today you would earn a total of 576.00 from holding BayCom Corp or generate 24.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Banco Santander Chile vs. BayCom Corp
Performance |
Timeline |
Banco Santander Chile |
BayCom Corp |
Banco Santander and BayCom Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Santander and BayCom Corp
The main advantage of trading using opposite Banco Santander and BayCom Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, BayCom Corp 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 BayCom Corp will offset losses from the drop in BayCom Corp's long position.Banco Santander vs. Bancolombia SA ADR | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. Credicorp | Banco Santander vs. Banco Santander Brasil |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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