Correlation Between Banco Santander and Take Two
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Take Two 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 Take Two 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 Take Two Interactive Software, you can compare the effects of market volatilities on Banco Santander and Take Two 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 Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Take Two.
Diversification Opportunities for Banco Santander and Take Two
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Banco and Take is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Banco Santander i.e., Banco Santander and Take Two go up and down completely randomly.
Pair Corralation between Banco Santander and Take Two
Assuming the 90 days trading horizon Banco Santander is expected to generate 1.63 times less return on investment than Take Two. But when comparing it to its historical volatility, Banco Santander Chile is 1.17 times less risky than Take Two. It trades about 0.06 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,319 in Take Two Interactive Software on September 5, 2024 and sell it today you would earn a total of 15,257 from holding Take Two Interactive Software or generate 114.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Banco Santander Chile vs. Take Two Interactive Software
Performance |
| Timeline |
| Banco Santander Chile |
| Take Two Interactive |
Banco Santander and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Take Two
The main advantage of trading using opposite Banco Santander and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Banco Santander vs. Costco Wholesale | Banco Santander vs. Delta Air Lines | Banco Santander vs. Bemobi Mobile Tech | Banco Santander vs. Agilent Technologies |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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