Correlation Between Banco Santander and Cable One
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Cable One 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 Cable One 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 Cable One, you can compare the effects of market volatilities on Banco Santander and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Cable One.
Diversification Opportunities for Banco Santander and Cable One
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banco and Cable is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Banco Santander i.e., Banco Santander and Cable One go up and down completely randomly.
Pair Corralation between Banco Santander and Cable One
Assuming the 90 days trading horizon Banco Santander Chile is expected to generate 0.48 times more return on investment than Cable One. However, Banco Santander Chile is 2.08 times less risky than Cable One. It trades about 0.05 of its potential returns per unit of risk. Cable One is currently generating about -0.02 per unit of risk. If you would invest 4,456 in Banco Santander Chile on August 28, 2024 and sell it today you would earn a total of 1,129 from holding Banco Santander Chile or generate 25.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.37% |
| Values | Daily Returns |
Banco Santander Chile vs. Cable One
Performance |
| Timeline |
| Banco Santander Chile |
| Cable One |
Banco Santander and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Cable One
The main advantage of trading using opposite Banco Santander and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Banco Santander vs. Fras le SA | Banco Santander vs. Clave Indices De | Banco Santander vs. BTG Pactual Logstica | Banco Santander vs. Telefonaktiebolaget LM Ericsson |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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