Correlation Between Banco Santander and Odontoprev

Can any of the company-specific risk be diversified away by investing in both Banco Santander and Odontoprev 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 Odontoprev 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 Odontoprev SA, you can compare the effects of market volatilities on Banco Santander and Odontoprev 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 Odontoprev. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Odontoprev.

Diversification Opportunities for Banco Santander and Odontoprev

-0.37

Correlation Coefficient

Banco Santander  Odontoprev

Very good diversification

The 3 months correlation between Banco and Odontoprev is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Odontoprev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odontoprev SA 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 Odontoprev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odontoprev SA has no effect on the direction of Banco Santander i.e., Banco Santander and Odontoprev go up and down completely randomly.

Pair Corralation between Banco Santander and Odontoprev

Assuming the 90 days trading horizon Banco Santander Chile is expected to under-perform the Odontoprev. In addition to that, Banco Santander is 1.12 times more volatile than Odontoprev SA. It trades about -0.02 of its total potential returns per unit of risk. Odontoprev SA is currently generating about 0.11 per unit of volatility. If you would invest  1,043  in Odontoprev SA on April 25, 2025 and sell it today you would earn a total of  111.00  from holding Odontoprev SA or generate 10.64% return on investment over 90 days.

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

Banco Santander Chile  vs.  Odontoprev SA

Banco Santander Chile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Santander Chile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Banco Santander is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Odontoprev SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Odontoprev SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Odontoprev may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Banco Santander and Odontoprev

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

The idea behind Banco Santander Chile and Odontoprev 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.