Correlation Between Santander Bank and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Santander Bank and THAI BEVERAGE 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 Santander Bank and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santander Bank Polska and THAI BEVERAGE, you can compare the effects of market volatilities on Santander Bank and THAI BEVERAGE 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 Santander Bank with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and THAI BEVERAGE.
Diversification Opportunities for Santander Bank and THAI BEVERAGE
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Santander and THAI is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Santander Bank 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 Santander Bank Polska are associated (or correlated) with THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of Santander Bank i.e., Santander Bank and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Santander Bank and THAI BEVERAGE
Assuming the 90 days horizon Santander Bank is expected to generate 1.16 times less return on investment than THAI BEVERAGE. But when comparing it to its historical volatility, Santander Bank Polska is 1.27 times less risky than THAI BEVERAGE. It trades about 0.08 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 19.00 in THAI BEVERAGE on September 14, 2024 and sell it today you would earn a total of 19.00 from holding THAI BEVERAGE or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Santander Bank Polska vs. THAI BEVERAGE
Performance |
| Timeline |
| Santander Bank Polska |
| THAI BEVERAGE |
Santander Bank and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and THAI BEVERAGE
The main advantage of trading using opposite Santander Bank and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE's long position.| Santander Bank vs. THAI BEVERAGE | Santander Bank vs. LG Display Co | Santander Bank vs. ALERION CLEANPOWER | Santander Bank vs. Cleanaway Waste Management |
| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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