Correlation Between Auction Technology and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Auction Technology 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 Auction Technology and SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and SANTANDER UK 8, you can compare the effects of market volatilities on Auction Technology 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 Auction Technology with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and SANTANDER.
Diversification Opportunities for Auction Technology and SANTANDER
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Auction and SANTANDER is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and SANTANDER UK 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 8 and Auction Technology 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 Auction Technology 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 8 has no effect on the direction of Auction Technology i.e., Auction Technology and SANTANDER go up and down completely randomly.
Pair Corralation between Auction Technology and SANTANDER
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 19.25 times more return on investment than SANTANDER. However, Auction Technology is 19.25 times more volatile than SANTANDER UK 8. It trades about 0.17 of its potential returns per unit of risk. SANTANDER UK 8 is currently generating about -0.08 per unit of risk. If you would invest 45,050 in Auction Technology Group on September 1, 2024 and sell it today you would earn a total of 6,550 from holding Auction Technology Group or generate 14.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. SANTANDER UK 8
Performance |
| Timeline |
| Auction Technology |
| SANTANDER UK 8 |
Auction Technology and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and SANTANDER
The main advantage of trading using opposite Auction Technology and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology 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.| Auction Technology vs. SupplyMe Capital PLC | Auction Technology vs. Lloyds Banking Group | Auction Technology vs. Premier African Minerals | Auction Technology vs. SANTANDER UK 8 |
| SANTANDER vs. Auction Technology Group | SANTANDER vs. Hochschild Mining plc | SANTANDER vs. Vitec Software Group | SANTANDER vs. Blackrock World Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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