Correlation Between Perficient and Banco Santander

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Can any of the company-specific risk be diversified away by investing in both Perficient 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 Perficient and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perficient and Banco Santander ADR, you can compare the effects of market volatilities on Perficient 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 Perficient with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perficient and Banco Santander.

Diversification Opportunities for Perficient and Banco Santander

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Perficient and Banco is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Perficient and Banco Santander ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander ADR and Perficient 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 Perficient 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 ADR has no effect on the direction of Perficient i.e., Perficient and Banco Santander go up and down completely randomly.

Pair Corralation between Perficient and Banco Santander

Given the investment horizon of 90 days Perficient is expected to generate 1.2 times more return on investment than Banco Santander. However, Perficient is 1.2 times more volatile than Banco Santander ADR. It trades about 0.0 of its potential returns per unit of risk. Banco Santander ADR is currently generating about -0.01 per unit of risk. If you would invest  8,213  in Perficient on August 28, 2022 and sell it today you would lose (1,269)  from holding Perficient or give up 15.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Perficient  vs.  Banco Santander ADR

 Performance (%) 
       Timeline  
Perficient 
Perficient Performance
0 of 100
Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Perficient Price Channel

Banco Santander ADR 
Banco Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Banco Santander ADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish basic indicators, Banco Santander disclosed solid returns over the last few months and may actually be approaching a breakup point.

Banco Price Channel

Perficient and Banco Santander Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Perficient and Banco Santander

The main advantage of trading using opposite Perficient and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perficient 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.
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The idea behind Perficient and Banco Santander ADR 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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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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