Correlation Between Banco Santander and Goosehead Insurance
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Goosehead Insurance 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 Goosehead Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander SA and Goosehead Insurance, you can compare the effects of market volatilities on Banco Santander and Goosehead Insurance 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 Goosehead Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Goosehead Insurance.
Diversification Opportunities for Banco Santander and Goosehead Insurance
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and Goosehead is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance 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 SA are associated (or correlated) with Goosehead Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goosehead Insurance has no effect on the direction of Banco Santander i.e., Banco Santander and Goosehead Insurance go up and down completely randomly.
Pair Corralation between Banco Santander and Goosehead Insurance
Assuming the 90 days trading horizon Banco Santander SA is expected to under-perform the Goosehead Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander SA is 1.34 times less risky than Goosehead Insurance. The stock trades about -0.08 of its potential returns per unit of risk. The Goosehead Insurance is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 10,000 in Goosehead Insurance on September 1, 2024 and sell it today you would earn a total of 1,960 from holding Goosehead Insurance or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Banco Santander SA vs. Goosehead Insurance
Performance |
| Timeline |
| Banco Santander SA |
| Goosehead Insurance |
Banco Santander and Goosehead Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Goosehead Insurance
The main advantage of trading using opposite Banco Santander and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Goosehead Insurance 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 Goosehead Insurance will offset losses from the drop in Goosehead Insurance's long position.| Banco Santander vs. Monster Beverage Corp | Banco Santander vs. NIPPON MEAT PACKERS | Banco Santander vs. Tsingtao Brewery | Banco Santander vs. Thai Beverage Public |
| Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |