Correlation Between Fidelity National and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Banco Santander SA, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Banco Santander.
Diversification Opportunities for Fidelity National and Banco Santander
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Banco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information 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 Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Banco Santander go up and down completely randomly.
Pair Corralation between Fidelity National and Banco Santander
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Banco Santander. In addition to that, Fidelity National is 2.54 times more volatile than Banco Santander SA. It trades about -0.23 of its total potential returns per unit of risk. Banco Santander SA is currently generating about -0.09 per unit of volatility. If you would invest 1,244 in Banco Santander SA on December 11, 2024 and sell it today you would lose (30.00) from holding Banco Santander SA or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Banco Santander SA
Performance |
| Timeline |
| Fidelity National |
| Banco Santander SA |
Fidelity National and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Banco Santander
The main advantage of trading using opposite Fidelity National and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.| Fidelity National vs. G2D Investments | Fidelity National vs. TC Traders Club | Fidelity National vs. United Natural Foods, | Fidelity National vs. Beyond Meat |
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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 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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