Correlation Between Dow Jones and BANCO
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By analyzing existing cross correlation between Dow Jones Industrial and BANCO SANTANDER SA, you can compare the effects of market volatilities on Dow Jones and BANCO 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 Dow Jones with a short position of BANCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and BANCO.
Diversification Opportunities for Dow Jones and BANCO
Excellent diversification
The 3 months correlation between Dow and BANCO is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial are associated (or correlated) with BANCO. 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 Dow Jones i.e., Dow Jones and BANCO go up and down completely randomly.
Pair Corralation between Dow Jones and BANCO
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.7 times more return on investment than BANCO. However, Dow Jones Industrial is 1.43 times less risky than BANCO. It trades about 0.05 of its potential returns per unit of risk. BANCO SANTANDER SA is currently generating about -0.16 per unit of risk. If you would invest 4,391,098 in Dow Jones Industrial on September 13, 2024 and sell it today you would earn a total of 23,758 from holding Dow Jones Industrial or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Dow Jones Industrial vs. BANCO SANTANDER SA
Performance |
| Timeline |
Dow Jones and BANCO Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
BANCO SANTANDER SA
Pair trading matchups for BANCO
Pair Trading with Dow Jones and BANCO
The main advantage of trading using opposite Dow Jones and BANCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, BANCO 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 will offset losses from the drop in BANCO's long position.| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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