Correlation Between SANTANDER and ETC On
Can any of the company-specific risk be diversified away by investing in both SANTANDER and ETC On 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 SANTANDER and ETC On into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANTANDER UK 10 and ETC on CMCI, you can compare the effects of market volatilities on SANTANDER and ETC On 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 SANTANDER with a short position of ETC On. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and ETC On.
Diversification Opportunities for SANTANDER and ETC On
Weak diversification
The 3 months correlation between SANTANDER and ETC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and ETC on CMCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC on CMCI and SANTANDER 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 SANTANDER UK 10 are associated (or correlated) with ETC On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC on CMCI has no effect on the direction of SANTANDER i.e., SANTANDER and ETC On go up and down completely randomly.
Pair Corralation between SANTANDER and ETC On
Assuming the 90 days trading horizon SANTANDER UK 10 is expected to generate 1.26 times more return on investment than ETC On. However, SANTANDER is 1.26 times more volatile than ETC on CMCI. It trades about 0.07 of its potential returns per unit of risk. ETC on CMCI is currently generating about 0.01 per unit of risk. If you would invest 11,771 in SANTANDER UK 10 on September 3, 2024 and sell it today you would earn a total of 4,099 from holding SANTANDER UK 10 or generate 34.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SANTANDER UK 10 vs. ETC on CMCI
Performance |
| Timeline |
| SANTANDER UK 10 |
| ETC on CMCI |
SANTANDER and ETC On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and ETC On
The main advantage of trading using opposite SANTANDER and ETC On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, ETC On 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 ETC On will offset losses from the drop in ETC On's long position.| SANTANDER vs. MediaZest plc | SANTANDER vs. Greenroc Mining PLC | SANTANDER vs. Blackrock World Mining | SANTANDER vs. One Media iP |
| ETC On vs. Scottish Mortgage Investment | ETC On vs. VinaCapital Vietnam Opportunity | ETC On vs. Edinburgh Worldwide Investment | ETC On vs. Baillie Gifford Growth |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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