Correlation Between Agora SA and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Agora 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 Agora 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 Agora SA and Banco Santander SA, you can compare the effects of market volatilities on Agora 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 Agora SA with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agora SA and Banco Santander.
Diversification Opportunities for Agora SA and Banco Santander
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agora and Banco is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Agora 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 Agora 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 Agora 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 Agora SA i.e., Agora SA and Banco Santander go up and down completely randomly.
Pair Corralation between Agora SA and Banco Santander
Assuming the 90 days trading horizon Agora SA is expected to under-perform the Banco Santander. In addition to that, Agora SA is 1.33 times more volatile than Banco Santander SA. It trades about -0.13 of its total potential returns per unit of risk. Banco Santander SA is currently generating about -0.02 per unit of volatility. If you would invest 2,023 in Banco Santander SA on September 1, 2024 and sell it today you would lose (145.00) from holding Banco Santander SA or give up 7.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Agora SA vs. Banco Santander SA
Performance |
| Timeline |
| Agora SA |
| Banco Santander SA |
Agora SA and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agora SA and Banco Santander
The main advantage of trading using opposite Agora SA and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agora 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.| Agora SA vs. Banco Santander SA | Agora SA vs. UniCredit SpA | Agora SA vs. CEZ as | Agora SA vs. Polski Koncern Naftowy |
| Banco Santander vs. Quantum Software SA | Banco Santander vs. New Tech Venture | Banco Santander vs. Enter Air SA | Banco Santander vs. BNP Paribas 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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