Correlation Between Banco Santander and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Omega Healthcare 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 Omega Healthcare 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 Omega Healthcare Investors,, you can compare the effects of market volatilities on Banco Santander and Omega Healthcare 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 Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Omega Healthcare.
Diversification Opportunities for Banco Santander and Omega Healthcare
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banco and Omega is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Omega Healthcare Investors, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv 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 Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Banco Santander i.e., Banco Santander and Omega Healthcare go up and down completely randomly.
Pair Corralation between Banco Santander and Omega Healthcare
Assuming the 90 days trading horizon Banco Santander Chile is expected to generate 0.73 times more return on investment than Omega Healthcare. However, Banco Santander Chile is 1.36 times less risky than Omega Healthcare. It trades about 0.13 of its potential returns per unit of risk. Omega Healthcare Investors, is currently generating about -0.26 per unit of risk. If you would invest 5,796 in Banco Santander Chile on October 30, 2024 and sell it today you would earn a total of 140.00 from holding Banco Santander Chile or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Chile vs. Omega Healthcare Investors,
Performance |
| Timeline |
| Banco Santander Chile |
| Omega Healthcare Inv |
Banco Santander and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Omega Healthcare
The main advantage of trading using opposite Banco Santander and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.| Banco Santander vs. Zoom Video Communications | Banco Santander vs. Telecomunicaes Brasileiras SA | Banco Santander vs. Chunghwa Telecom Co, | Banco Santander vs. Check Point Software |
| Omega Healthcare vs. Metalurgica Gerdau SA | Omega Healthcare vs. Burlington Stores, | Omega Healthcare vs. Metalrgica Riosulense SA | Omega Healthcare vs. Liberty Broadband |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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