Correlation Between Banco Santander and Air Products
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Air Products 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 Banco Santander and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander Chile and Air Products and, you can compare the effects of market volatilities on Banco Santander and Air Products 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 Banco Santander with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Air Products.
Diversification Opportunities for Banco Santander and Air Products
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and Air is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Banco Santander 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 Banco Santander Chile are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Banco Santander i.e., Banco Santander and Air Products go up and down completely randomly.
Pair Corralation between Banco Santander and Air Products
Assuming the 90 days trading horizon Banco Santander is expected to generate 2.14 times less return on investment than Air Products. But when comparing it to its historical volatility, Banco Santander Chile is 1.26 times less risky than Air Products. It trades about 0.07 of its potential returns per unit of risk. Air Products and is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 30,509 in Air Products and on October 25, 2024 and sell it today you would earn a total of 15,391 from holding Air Products and or generate 50.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.51% |
| Values | Daily Returns |
Banco Santander Chile vs. Air Products and
Performance |
| Timeline |
| Banco Santander Chile |
| Air Products |
Banco Santander and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Air Products
The main advantage of trading using opposite Banco Santander and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Banco Santander vs. Teladoc Health | Banco Santander vs. Ameriprise Financial | Banco Santander vs. Credit Acceptance | Banco Santander vs. The Hartford Financial |
| Air Products vs. Align Technology | Air Products vs. JB Hunt Transport | Air Products vs. MAHLE Metal Leve | Air Products vs. Bio Techne |
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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