Correlation Between Banco Santander and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Annaly Capital 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 Annaly Capital 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 Annaly Capital Management,, you can compare the effects of market volatilities on Banco Santander and Annaly Capital 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 Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Annaly Capital.
Diversification Opportunities for Banco Santander and Annaly Capital
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banco and Annaly is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Annaly Capital Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Manag 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 Annaly Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annaly Capital Manag has no effect on the direction of Banco Santander i.e., Banco Santander and Annaly Capital go up and down completely randomly.
Pair Corralation between Banco Santander and Annaly Capital
Assuming the 90 days trading horizon Banco Santander Chile is expected to generate 0.73 times more return on investment than Annaly Capital. However, Banco Santander Chile is 1.36 times less risky than Annaly Capital. It trades about -0.2 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about -0.24 per unit of risk. If you would invest 5,766 in Banco Santander Chile on October 14, 2024 and sell it today you would lose (189.00) from holding Banco Santander Chile or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Banco Santander Chile vs. Annaly Capital Management,
Performance |
| Timeline |
| Banco Santander Chile |
| Annaly Capital Manag |
Banco Santander and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Annaly Capital
The main advantage of trading using opposite Banco Santander and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Annaly Capital 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 Annaly Capital will offset losses from the drop in Annaly Capital's long position.| Banco Santander vs. Paycom Software | Banco Santander vs. Micron Technology | Banco Santander vs. Monster Beverage | Banco Santander vs. Marfrig Global Foods |
| Annaly Capital vs. Taiwan Semiconductor Manufacturing | Annaly Capital vs. Apple Inc | Annaly Capital vs. Alibaba Group Holding | Annaly Capital vs. Banco Santander Chile |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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