Correlation Between Este Lauder and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Este Lauder 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 Este Lauder and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Este Lauder and Banco Santander SA, you can compare the effects of market volatilities on Este Lauder 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 Este Lauder with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and Banco Santander.
Diversification Opportunities for Este Lauder and Banco Santander
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Este and Banco is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder 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 Este Lauder 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 The Este Lauder 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 Este Lauder i.e., Este Lauder and Banco Santander go up and down completely randomly.
Pair Corralation between Este Lauder and Banco Santander
Assuming the 90 days trading horizon The Este Lauder is expected to under-perform the Banco Santander. In addition to that, Este Lauder is 2.94 times more volatile than Banco Santander SA. It trades about -0.19 of its total potential returns per unit of risk. Banco Santander SA is currently generating about 0.01 per unit of volatility. If you would invest 450.00 in Banco Santander SA on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Banco Santander SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Este Lauder vs. Banco Santander SA
Performance |
| Timeline |
| Este Lauder |
| Banco Santander SA |
Este Lauder and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Este Lauder and Banco Santander
The main advantage of trading using opposite Este Lauder and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Este Lauder 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.| Este Lauder vs. UNIQA Insurance Group | Este Lauder vs. CNH Industrial NV | Este Lauder vs. Erste Group Bank | Este Lauder vs. Universal Music Group |
| Banco Santander vs. AT S Austria | Banco Santander vs. BAWAG Group AG | Banco Santander vs. Semperit Aktiengesellschaft Holding | Banco Santander vs. Telekom Austria AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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