Correlation Between Transport International and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Transport International 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 Transport International and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and Banco Santander SA, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Banco Santander.
Diversification Opportunities for Transport International and Banco Santander
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Transport and Banco is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin 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 Transport International 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 Transport International Holdings 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 Transport International i.e., Transport International and Banco Santander go up and down completely randomly.
Pair Corralation between Transport International and Banco Santander
Assuming the 90 days horizon Transport International Holdings is expected to under-perform the Banco Santander. But the stock apears to be less risky and, when comparing its historical volatility, Transport International Holdings is 2.34 times less risky than Banco Santander. The stock trades about -0.07 of its potential returns per unit of risk. The Banco Santander SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 452.00 in Banco Santander SA on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Banco Santander SA or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Transport International Holdin vs. Banco Santander SA
Performance |
| Timeline |
| Transport International |
| Banco Santander SA |
Transport International and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Banco Santander
The main advantage of trading using opposite Transport International and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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.| Transport International vs. CSX Corporation | Transport International vs. Westinghouse Air Brake | Transport International vs. Superior Plus Corp | Transport International vs. SIVERS SEMICONDUCTORS AB |
| Banco Santander vs. Lamar Advertising | Banco Santander vs. PPHE HOTEL GROUP | Banco Santander vs. Meli Hotels International | Banco Santander vs. YATRA ONLINE DL 0001 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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