Correlation Between Lupatech and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Lupatech 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 Lupatech and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Banco Santander SA, you can compare the effects of market volatilities on Lupatech 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 Lupatech with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Banco Santander.
Diversification Opportunities for Lupatech and Banco Santander
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lupatech and Banco is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech 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 Lupatech 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 Lupatech 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 Lupatech i.e., Lupatech and Banco Santander go up and down completely randomly.
Pair Corralation between Lupatech and Banco Santander
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Banco Santander. But the stock apears to be less risky and, when comparing its historical volatility, Lupatech SA is 1.11 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 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,735 in Banco Santander SA on September 15, 2024 and sell it today you would earn a total of 241.00 from holding Banco Santander SA or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lupatech SA vs. Banco Santander SA
Performance |
| Timeline |
| Lupatech SA |
| Banco Santander SA |
Lupatech and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Banco Santander
The main advantage of trading using opposite Lupatech and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech 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.| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Gafisa SA |
| Banco Santander vs. Warner Music Group | Banco Santander vs. Bread Financial Holdings | Banco Santander vs. Take Two Interactive Software | Banco Santander vs. Bank of America |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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