Correlation Between Autohome and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Autohome 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 Autohome and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome and Banco Santander Chile, you can compare the effects of market volatilities on Autohome 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 Autohome with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Banco Santander.
Diversification Opportunities for Autohome and Banco Santander
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Autohome and Banco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Autohome and Banco Santander Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Chile and Autohome 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 Autohome 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 Chile has no effect on the direction of Autohome i.e., Autohome and Banco Santander go up and down completely randomly.
Pair Corralation between Autohome and Banco Santander
Assuming the 90 days trading horizon Autohome is expected to generate 1.69 times more return on investment than Banco Santander. However, Autohome is 1.69 times more volatile than Banco Santander Chile. It trades about 0.18 of its potential returns per unit of risk. Banco Santander Chile is currently generating about 0.08 per unit of risk. If you would invest 1,557 in Autohome on September 14, 2024 and sell it today you would earn a total of 125.00 from holding Autohome or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome vs. Banco Santander Chile
Performance |
| Timeline |
| Autohome |
| Banco Santander Chile |
Autohome and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and Banco Santander
The main advantage of trading using opposite Autohome and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome 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.| Autohome vs. Nordon Indstrias Metalrgicas | Autohome vs. Uber Technologies | Autohome vs. Technos SA | Autohome vs. The Home Depot |
| Banco Santander vs. Spotify Technology SA | Banco Santander vs. Hospital Mater Dei | Banco Santander vs. Fidelity National Information | Banco Santander vs. Lloyds Banking Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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