Correlation Between Nationwide Building and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Nationwide Building 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 Nationwide Building and SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Building Society and SANTANDER UK 8, you can compare the effects of market volatilities on Nationwide Building 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 Nationwide Building with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Building and SANTANDER.
Diversification Opportunities for Nationwide Building and SANTANDER
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nationwide and SANTANDER is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Building Society 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 Nationwide Building 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 Nationwide Building Society 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 Nationwide Building i.e., Nationwide Building and SANTANDER go up and down completely randomly.
Pair Corralation between Nationwide Building and SANTANDER
Assuming the 90 days trading horizon Nationwide Building Society is expected to under-perform the SANTANDER. But the stock apears to be less risky and, when comparing its historical volatility, Nationwide Building Society is 2.4 times less risky than SANTANDER. The stock trades about -0.21 of its potential returns per unit of risk. The SANTANDER UK 8 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 13,550 in SANTANDER UK 8 on September 23, 2024 and sell it today you would earn a total of 100.00 from holding SANTANDER UK 8 or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Building Society vs. SANTANDER UK 8
Performance |
| Timeline |
| Nationwide Building |
| SANTANDER UK 8 |
Nationwide Building and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Building and SANTANDER
The main advantage of trading using opposite Nationwide Building and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Building 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.| Nationwide Building vs. Quadrise Plc | Nationwide Building vs. ImmuPharma PLC | Nationwide Building vs. Intuitive Investments Group | Nationwide Building vs. European Metals Holdings |
| SANTANDER vs. CVR Energy | SANTANDER vs. Viridian Therapeutics | SANTANDER vs. Nationwide Building Society | SANTANDER vs. Digital Realty Trust |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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