Correlation Between SANTANDER and One Media
Can any of the company-specific risk be diversified away by investing in both SANTANDER and One Media 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 One Media 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 One Media iP, you can compare the effects of market volatilities on SANTANDER and One Media 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 One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and One Media.
Diversification Opportunities for SANTANDER and One Media
Very good diversification
The 3 months correlation between SANTANDER and One is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of SANTANDER i.e., SANTANDER and One Media go up and down completely randomly.
Pair Corralation between SANTANDER and One Media
Assuming the 90 days trading horizon SANTANDER UK 10 is expected to under-perform the One Media. But the stock apears to be less risky and, when comparing its historical volatility, SANTANDER UK 10 is 7.14 times less risky than One Media. The stock trades about -0.04 of its potential returns per unit of risk. The One Media iP is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 375.00 in One Media iP on September 14, 2024 and sell it today you would earn a total of 50.00 from holding One Media iP or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANTANDER UK 10 vs. One Media iP
Performance |
| Timeline |
| SANTANDER UK 10 |
| One Media iP |
SANTANDER and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and One Media
The main advantage of trading using opposite SANTANDER and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, One Media 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 One Media will offset losses from the drop in One Media's long position.| SANTANDER vs. Walmart | SANTANDER vs. BYD Co | SANTANDER vs. Volkswagen AG Non Vtg | SANTANDER vs. Compass Group PLC |
| One Media vs. Catalyst Media Group | One Media vs. CATLIN GROUP | One Media vs. RTW Venture Fund | One Media vs. SANTANDER UK 10 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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