Correlation Between Lowes Companies and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Lowes Companies 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 Lowes Companies and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Banco Santander SA, you can compare the effects of market volatilities on Lowes Companies 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 Lowes Companies with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Banco Santander.
Diversification Opportunities for Lowes Companies and Banco Santander
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lowes and Banco is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies 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 Lowes Companies 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 Lowes Companies 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 Lowes Companies i.e., Lowes Companies and Banco Santander go up and down completely randomly.
Pair Corralation between Lowes Companies and Banco Santander
Assuming the 90 days trading horizon Lowes Companies is expected to generate 1.18 times more return on investment than Banco Santander. However, Lowes Companies is 1.18 times more volatile than Banco Santander SA. It trades about 0.09 of its potential returns per unit of risk. Banco Santander SA is currently generating about -0.03 per unit of risk. If you would invest 5,000 in Lowes Companies on August 31, 2024 and sell it today you would earn a total of 3,105 from holding Lowes Companies or generate 62.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Lowes Companies vs. Banco Santander SA
Performance |
| Timeline |
| Lowes Companies |
| Banco Santander SA |
Lowes Companies and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Banco Santander
The main advantage of trading using opposite Lowes Companies and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies 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.| Lowes Companies vs. Take Two Interactive Software | Lowes Companies vs. Charter Communications | Lowes Companies vs. MAHLE Metal Leve | Lowes Companies vs. Automatic Data Processing |
| Banco Santander vs. Ita Unibanco Holding | Banco Santander vs. Banco Santander SA | Banco Santander vs. Itasa Investimentos |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |