Correlation Between Natural Health and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Natural Health and Santander Bank 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 Natural Health and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Santander Bank Polska, you can compare the effects of market volatilities on Natural Health and Santander Bank 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 Natural Health with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Santander Bank.
Diversification Opportunities for Natural Health and Santander Bank
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Santander is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and Santander Bank Polska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santander Bank Polska and Natural Health 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 Natural Health Trends are associated (or correlated) with Santander Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santander Bank Polska has no effect on the direction of Natural Health i.e., Natural Health and Santander Bank go up and down completely randomly.
Pair Corralation between Natural Health and Santander Bank
Assuming the 90 days trading horizon Natural Health is expected to generate 1.71 times less return on investment than Santander Bank. In addition to that, Natural Health is 1.57 times more volatile than Santander Bank Polska. It trades about 0.1 of its total potential returns per unit of risk. Santander Bank Polska is currently generating about 0.28 per unit of volatility. If you would invest 10,800 in Santander Bank Polska on November 3, 2024 and sell it today you would earn a total of 1,350 from holding Santander Bank Polska or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Santander Bank Polska
Performance |
| Timeline |
| Natural Health Trends |
| Santander Bank Polska |
Natural Health and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Santander Bank
The main advantage of trading using opposite Natural Health and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, Santander Bank 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 Bank will offset losses from the drop in Santander Bank's long position.| Natural Health vs. SQUIRREL MEDIA SA | Natural Health vs. Firan Technology Group | Natural Health vs. ATRESMEDIA | Natural Health vs. Tencent Music Entertainment |
| Santander Bank vs. WT OFFSHORE | Santander Bank vs. Take Two Interactive Software | Santander Bank vs. CSSC Offshore Marine | Santander Bank vs. PRECISION DRILLING P |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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