Correlation Between Bell Food and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Bell Food and 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 Bell Food and SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Food Group and SANTANDER UK 10, you can compare the effects of market volatilities on Bell Food and 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 Bell Food with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and SANTANDER.
Diversification Opportunities for Bell Food and SANTANDER
Very good diversification
The 3 months correlation between Bell and SANTANDER is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and SANTANDER UK 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 10 and Bell Food 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 Bell Food Group are associated (or correlated) with SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 10 has no effect on the direction of Bell Food i.e., Bell Food and SANTANDER go up and down completely randomly.
Pair Corralation between Bell Food and SANTANDER
Assuming the 90 days trading horizon Bell Food is expected to generate 2.06 times less return on investment than SANTANDER. In addition to that, Bell Food is 1.11 times more volatile than SANTANDER UK 10. It trades about 0.03 of its total potential returns per unit of risk. SANTANDER UK 10 is currently generating about 0.06 per unit of volatility. If you would invest 11,784 in SANTANDER UK 10 on September 12, 2024 and sell it today you would earn a total of 3,851 from holding SANTANDER UK 10 or generate 32.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bell Food Group vs. SANTANDER UK 10
Performance |
| Timeline |
| Bell Food Group |
| SANTANDER UK 10 |
Bell Food and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and SANTANDER
The main advantage of trading using opposite Bell Food and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, 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 SANTANDER will offset losses from the drop in SANTANDER's long position.| Bell Food vs. Hong Kong Land | Bell Food vs. Neometals | Bell Food vs. Coor Service Management | Bell Food vs. Fidelity Sustainable USD |
| SANTANDER vs. Alior Bank SA | SANTANDER vs. Zegona Communications Plc | SANTANDER vs. Sparebank 1 SR | SANTANDER vs. Cembra Money Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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