Correlation Between Orient Telecoms and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Orient Telecoms 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 Orient Telecoms and SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Telecoms and SANTANDER UK 8, you can compare the effects of market volatilities on Orient Telecoms 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 Orient Telecoms with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Telecoms and SANTANDER.
Diversification Opportunities for Orient Telecoms and SANTANDER
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orient and SANTANDER is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Orient Telecoms 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 Orient Telecoms 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 Orient Telecoms 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 Orient Telecoms i.e., Orient Telecoms and SANTANDER go up and down completely randomly.
Pair Corralation between Orient Telecoms and SANTANDER
Assuming the 90 days trading horizon Orient Telecoms is expected to under-perform the SANTANDER. In addition to that, Orient Telecoms is 2.76 times more volatile than SANTANDER UK 8. It trades about -0.06 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.07 per unit of volatility. If you would invest 10,589 in SANTANDER UK 8 on September 14, 2024 and sell it today you would earn a total of 2,961 from holding SANTANDER UK 8 or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Telecoms vs. SANTANDER UK 8
Performance |
| Timeline |
| Orient Telecoms |
| SANTANDER UK 8 |
Orient Telecoms and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Telecoms and SANTANDER
The main advantage of trading using opposite Orient Telecoms and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Telecoms 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.| Orient Telecoms vs. SM Energy Co | Orient Telecoms vs. FuelCell Energy | Orient Telecoms vs. Grand Vision Media | Orient Telecoms vs. DG Innovate PLC |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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