Correlation Between Premier Foods and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Premier Foods 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 Premier Foods and SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods PLC and SANTANDER UK 10, you can compare the effects of market volatilities on Premier Foods 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 Premier Foods with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and SANTANDER.
Diversification Opportunities for Premier Foods and SANTANDER
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Premier and SANTANDER is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods PLC and SANTANDER UK 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 10 and Premier Foods 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 Premier Foods PLC 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 10 has no effect on the direction of Premier Foods i.e., Premier Foods and SANTANDER go up and down completely randomly.
Pair Corralation between Premier Foods and SANTANDER
Assuming the 90 days trading horizon Premier Foods PLC is expected to generate 7.76 times more return on investment than SANTANDER. However, Premier Foods is 7.76 times more volatile than SANTANDER UK 10. It trades about 0.03 of its potential returns per unit of risk. SANTANDER UK 10 is currently generating about -0.15 per unit of risk. If you would invest 18,660 in Premier Foods PLC on November 3, 2024 and sell it today you would earn a total of 120.00 from holding Premier Foods PLC or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Premier Foods PLC vs. SANTANDER UK 10
Performance |
| Timeline |
| Premier Foods PLC |
| SANTANDER UK 10 |
Premier Foods and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and SANTANDER
The main advantage of trading using opposite Premier Foods and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods 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.| Premier Foods vs. Edinburgh Investment Trust | Premier Foods vs. Dairy Farm International | Premier Foods vs. American Homes 4 | Premier Foods vs. Livermore Investments Group |
| SANTANDER vs. Planet Fitness Cl | SANTANDER vs. Target Healthcare REIT | SANTANDER vs. CVS Health Corp | SANTANDER vs. Universal Music Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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