Correlation Between Brand 24 and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Brand 24 and Banco Santander 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 Brand 24 and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brand 24 SA and Banco Santander SA, you can compare the effects of market volatilities on Brand 24 and Banco Santander 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 Brand 24 with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brand 24 and Banco Santander.
Diversification Opportunities for Brand 24 and Banco Santander
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brand and Banco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brand 24 SA and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Brand 24 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 Brand 24 SA are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of Brand 24 i.e., Brand 24 and Banco Santander go up and down completely randomly.
Pair Corralation between Brand 24 and Banco Santander
Assuming the 90 days trading horizon Brand 24 is expected to generate 31.52 times less return on investment than Banco Santander. In addition to that, Brand 24 is 1.32 times more volatile than Banco Santander SA. It trades about 0.01 of its total potential returns per unit of risk. Banco Santander SA is currently generating about 0.35 per unit of volatility. If you would invest 1,889 in Banco Santander SA on November 4, 2024 and sell it today you would earn a total of 197.00 from holding Banco Santander SA or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brand 24 SA vs. Banco Santander SA
Performance |
| Timeline |
| Brand 24 SA |
| Banco Santander SA |
Brand 24 and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brand 24 and Banco Santander
The main advantage of trading using opposite Brand 24 and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brand 24 position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Brand 24 vs. Examobile SA | Brand 24 vs. Logintrade SA | Brand 24 vs. Inter Cars SA | Brand 24 vs. LSI Software SA |
| Banco Santander vs. ING Bank lski | Banco Santander vs. Mercator Medical SA | Banco Santander vs. Medicalg | Banco Santander vs. Gaming Factory SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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