Correlation Between Procter Gamble and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble DRC and Banco Santander SA, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Banco Santander.
Diversification Opportunities for Procter Gamble and Banco Santander
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Procter and Banco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble DRC 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 Procter Gamble 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 Procter Gamble DRC 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 Procter Gamble i.e., Procter Gamble and Banco Santander go up and down completely randomly.
Pair Corralation between Procter Gamble and Banco Santander
If you would invest 16,723 in Banco Santander SA on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Banco Santander SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble DRC vs. Banco Santander SA
Performance |
| Timeline |
| Procter Gamble DRC |
| Banco Santander SA |
Procter Gamble and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Banco Santander
The main advantage of trading using opposite Procter Gamble and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Agrometal SAI | Procter Gamble vs. Transportadora de Gas | Procter Gamble vs. Harmony Gold Mining | Procter Gamble vs. Compania de Transporte |
| Banco Santander vs. Alibaba Group Holding | Banco Santander vs. Apple Inc DRC | Banco Santander vs. Alphabet Inc Class A CEDEAR | Banco Santander vs. Amazon Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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