Correlation Between Austrian Traded and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Austrian Traded 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 Austrian Traded and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austrian Traded Index and Banco Santander SA, you can compare the effects of market volatilities on Austrian Traded 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 Austrian Traded with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austrian Traded and Banco Santander.
Diversification Opportunities for Austrian Traded and Banco Santander
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Austrian and Banco is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Austrian Traded Index 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 Austrian Traded 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 Austrian Traded Index 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 Austrian Traded i.e., Austrian Traded and Banco Santander go up and down completely randomly.
Pair Corralation between Austrian Traded and Banco Santander
Assuming the 90 days trading horizon Austrian Traded Index is expected to generate 0.53 times more return on investment than Banco Santander. However, Austrian Traded Index is 1.9 times less risky than Banco Santander. It trades about -0.09 of its potential returns per unit of risk. Banco Santander SA is currently generating about -0.08 per unit of risk. If you would invest 360,455 in Austrian Traded Index on August 27, 2024 and sell it today you would lose (7,189) from holding Austrian Traded Index or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austrian Traded Index vs. Banco Santander SA
Performance |
| Timeline |
Austrian Traded and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Austrian Traded Index
Pair trading matchups for Austrian Traded
Banco Santander SA
Pair trading matchups for Banco Santander
Pair Trading with Austrian Traded and Banco Santander
The main advantage of trading using opposite Austrian Traded and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austrian Traded 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.| Austrian Traded vs. Addiko Bank AG | Austrian Traded vs. Oberbank AG | Austrian Traded vs. AMAG Austria Metall | Austrian Traded vs. UNIQA Insurance Group |
| Banco Santander vs. RATH Aktiengesellschaft | Banco Santander vs. Semperit Aktiengesellschaft Holding | Banco Santander vs. Oesterr Post AG | Banco Santander vs. Anheuser Busch InBev SANV |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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