Correlation Between TOTAL GABON and Banco Santander
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON 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 TOTAL GABON and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and Banco Santander SA, you can compare the effects of market volatilities on TOTAL GABON 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 TOTAL GABON with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and Banco Santander.
Diversification Opportunities for TOTAL GABON and Banco Santander
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between TOTAL and Banco is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON i.e., TOTAL GABON and Banco Santander go up and down completely randomly.
Pair Corralation between TOTAL GABON and Banco Santander
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 2.13 times more return on investment than Banco Santander. However, TOTAL GABON is 2.13 times more volatile than Banco Santander SA. It trades about 0.19 of its potential returns per unit of risk. Banco Santander SA is currently generating about -0.11 per unit of risk. If you would invest 15,800 in TOTAL GABON on September 3, 2024 and sell it today you would earn a total of 2,600 from holding TOTAL GABON or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL GABON vs. Banco Santander SA
Performance |
| Timeline |
| TOTAL GABON |
| Banco Santander SA |
TOTAL GABON and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and Banco Santander
The main advantage of trading using opposite TOTAL GABON and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON 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.| TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL ENERGY SERVS | TOTAL GABON vs. Anheuser Busch InBev SANV |
| Banco Santander vs. TOTAL GABON | Banco Santander vs. Walgreens Boots Alliance | Banco Santander vs. Peak Resources Limited |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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