Correlation Between HSBC Holdings and Banco Santander
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By analyzing existing cross correlation between HSBC Holdings plc and Banco Santander SA, you can compare the effects of market volatilities on HSBC Holdings 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 HSBC Holdings with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Banco Santander.
Diversification Opportunities for HSBC Holdings and Banco Santander
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HSBC and Banco is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc 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 HSBC Holdings 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 HSBC Holdings plc 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 HSBC Holdings i.e., HSBC Holdings and Banco Santander go up and down completely randomly.
Pair Corralation between HSBC Holdings and Banco Santander
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.9 times more return on investment than Banco Santander. However, HSBC Holdings plc is 1.11 times less risky than Banco Santander. It trades about 0.1 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.05 per unit of risk. If you would invest 665.00 in HSBC Holdings plc on September 4, 2024 and sell it today you would earn a total of 237.00 from holding HSBC Holdings plc or generate 35.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. Banco Santander SA
Performance |
| Timeline |
| HSBC Holdings plc |
| Banco Santander SA |
HSBC Holdings and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Banco Santander
The main advantage of trading using opposite HSBC Holdings and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings 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.| HSBC Holdings vs. SBM OFFSHORE | HSBC Holdings vs. National Bank Holdings | HSBC Holdings vs. Park Hotels Resorts | HSBC Holdings vs. Wyndham Hotels Resorts |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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