Correlation Between Atal SA and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Atal SA 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 Atal SA and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atal SA and Banco Santander SA, you can compare the effects of market volatilities on Atal SA 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 Atal SA with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atal SA and Banco Santander.
Diversification Opportunities for Atal SA and Banco Santander
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Atal and Banco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Atal SA and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Atal SA 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 Atal SA 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 SA has no effect on the direction of Atal SA i.e., Atal SA and Banco Santander go up and down completely randomly.
Pair Corralation between Atal SA and Banco Santander
Assuming the 90 days trading horizon Atal SA is expected to generate 1.03 times more return on investment than Banco Santander. However, Atal SA is 1.03 times more volatile than Banco Santander SA. It trades about 0.08 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.06 per unit of risk. If you would invest 2,746 in Atal SA on September 4, 2024 and sell it today you would earn a total of 2,554 from holding Atal SA or generate 93.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Atal SA vs. Banco Santander SA
Performance |
| Timeline |
| Atal SA |
| Banco Santander SA |
Atal SA and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atal SA and Banco Santander
The main advantage of trading using opposite Atal SA and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atal SA 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.| Atal SA vs. Banco Santander SA | Atal SA vs. UniCredit SpA | Atal SA vs. CEZ as | Atal SA vs. Polski Koncern Naftowy |
| Banco Santander vs. Alior Bank SA | Banco Santander vs. Asseco South Eastern | Banco Santander vs. Vercom SA | Banco Santander vs. CFI Holding SA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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