Correlation Between Litigation Capital and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and 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 Litigation Capital and SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and SANTANDER UK 8, you can compare the effects of market volatilities on Litigation Capital and 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 Litigation Capital with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and SANTANDER.
Diversification Opportunities for Litigation Capital and SANTANDER
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Litigation and SANTANDER is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and SANTANDER UK 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 8 and Litigation Capital 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 Litigation Capital Management are associated (or correlated) with SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 8 has no effect on the direction of Litigation Capital i.e., Litigation Capital and SANTANDER go up and down completely randomly.
Pair Corralation between Litigation Capital and SANTANDER
Assuming the 90 days trading horizon Litigation Capital Management is expected to under-perform the SANTANDER. In addition to that, Litigation Capital is 9.11 times more volatile than SANTANDER UK 8. It trades about -0.38 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about -0.3 per unit of volatility. If you would invest 13,600 in SANTANDER UK 8 on November 7, 2024 and sell it today you would lose (250.00) from holding SANTANDER UK 8 or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. SANTANDER UK 8
Performance |
| Timeline |
| Litigation Capital |
| SANTANDER UK 8 |
Litigation Capital and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and SANTANDER
The main advantage of trading using opposite Litigation Capital and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, 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 SANTANDER will offset losses from the drop in SANTANDER's long position.| Litigation Capital vs. Westlake Chemical Corp | Litigation Capital vs. DFS Furniture PLC | Litigation Capital vs. Albion Technology General | Litigation Capital vs. Air Products Chemicals |
| SANTANDER vs. Ecclesiastical Insurance Office | SANTANDER vs. Geely Automobile Holdings | SANTANDER vs. Nordea Bank Abp | SANTANDER vs. Liechtensteinische Landesbank 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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