Correlation Between Mayr Melnhof and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Mayr Melnhof 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 Mayr Melnhof and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayr Melnhof Karton AG and Banco Santander SA, you can compare the effects of market volatilities on Mayr Melnhof 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 Mayr Melnhof with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayr Melnhof and Banco Santander.
Diversification Opportunities for Mayr Melnhof and Banco Santander
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mayr and Banco is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mayr Melnhof Karton AG 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 Mayr Melnhof 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 Mayr Melnhof Karton AG 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 Mayr Melnhof i.e., Mayr Melnhof and Banco Santander go up and down completely randomly.
Pair Corralation between Mayr Melnhof and Banco Santander
Assuming the 90 days trading horizon Mayr Melnhof Karton AG is expected to under-perform the Banco Santander. But the stock apears to be less risky and, when comparing its historical volatility, Mayr Melnhof Karton AG is 1.12 times less risky than Banco Santander. The stock trades about -0.41 of its potential returns per unit of risk. The Banco Santander SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 440.00 in Banco Santander SA on August 30, 2024 and sell it today you would lose (4.00) from holding Banco Santander SA or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayr Melnhof Karton AG vs. Banco Santander SA
Performance |
| Timeline |
| Mayr Melnhof Karton |
| Banco Santander SA |
Mayr Melnhof and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayr Melnhof and Banco Santander
The main advantage of trading using opposite Mayr Melnhof and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayr Melnhof 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.| Mayr Melnhof vs. Wienerberger AG | Mayr Melnhof vs. Andritz AG | Mayr Melnhof vs. Lenzing Aktiengesellschaft | Mayr Melnhof vs. EVN AG |
| Banco Santander vs. RATH Aktiengesellschaft | Banco Santander vs. AT S Austria | Banco Santander vs. BAWAG Group AG | Banco Santander vs. Semperit Aktiengesellschaft Holding |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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