Correlation Between IMC SA and Banco Santander
Can any of the company-specific risk be diversified away by investing in both IMC SA 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 IMC SA and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMC SA and Banco Santander SA, you can compare the effects of market volatilities on IMC SA 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 IMC SA with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMC SA and Banco Santander.
Diversification Opportunities for IMC SA and Banco Santander
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IMC and Banco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding IMC SA 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 IMC SA 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 IMC SA 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 IMC SA i.e., IMC SA and Banco Santander go up and down completely randomly.
Pair Corralation between IMC SA and Banco Santander
Assuming the 90 days trading horizon IMC SA is expected to under-perform the Banco Santander. In addition to that, IMC SA is 1.48 times more volatile than Banco Santander SA. It trades about 0.0 of its total potential returns per unit of risk. Banco Santander SA is currently generating about 0.06 per unit of volatility. If you would invest 1,214 in Banco Santander SA on September 2, 2024 and sell it today you would earn a total of 664.00 from holding Banco Santander SA or generate 54.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
IMC SA vs. Banco Santander SA
Performance |
| Timeline |
| IMC SA |
| Banco Santander SA |
IMC SA and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMC SA and Banco Santander
The main advantage of trading using opposite IMC SA and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMC SA 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.| IMC SA vs. Banco Santander SA | IMC SA vs. UniCredit SpA | IMC SA vs. CEZ as | IMC SA vs. Polski Koncern Naftowy |
| Banco Santander vs. True Games Syndicate | Banco Santander vs. Pyramid Games SA | Banco Santander vs. Cloud Technologies SA | Banco Santander vs. Creotech Instruments SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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