Correlation Between Rheinmetall and BANCO
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By analyzing existing cross correlation between Rheinmetall AG and BANCO SANTANDER SA, you can compare the effects of market volatilities on Rheinmetall and BANCO 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 Rheinmetall with a short position of BANCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and BANCO.
Diversification Opportunities for Rheinmetall and BANCO
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rheinmetall and BANCO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG 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 Rheinmetall 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 Rheinmetall AG are associated (or correlated) with BANCO. 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 Rheinmetall i.e., Rheinmetall and BANCO go up and down completely randomly.
Pair Corralation between Rheinmetall and BANCO
Assuming the 90 days horizon Rheinmetall AG is expected to generate 1.31 times more return on investment than BANCO. However, Rheinmetall is 1.31 times more volatile than BANCO SANTANDER SA. It trades about 0.47 of its potential returns per unit of risk. BANCO SANTANDER SA is currently generating about -0.22 per unit of risk. If you would invest 61,957 in Rheinmetall AG on November 2, 2024 and sell it today you would earn a total of 16,143 from holding Rheinmetall AG or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Rheinmetall AG vs. BANCO SANTANDER SA
Performance |
| Timeline |
| Rheinmetall AG |
| BANCO SANTANDER SA |
Rheinmetall and BANCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and BANCO
The main advantage of trading using opposite Rheinmetall and BANCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall position performs unexpectedly, BANCO 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 will offset losses from the drop in BANCO's long position.| Rheinmetall vs. Lockheed Martin | Rheinmetall vs. BAE Systems PLC | Rheinmetall vs. Qinetiq Group PLC | Rheinmetall vs. Leonardo SpA ADR |
| BANCO vs. Evertz Technologies Limited | BANCO vs. Asure Software | BANCO vs. Broadleaf Co | BANCO vs. United Airlines Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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