Correlation Between Banco Santander and Airbus Group
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Airbus Group 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 Banco Santander and Airbus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander and Airbus Group SE, you can compare the effects of market volatilities on Banco Santander and Airbus Group 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 Banco Santander with a short position of Airbus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Airbus Group.
Diversification Opportunities for Banco Santander and Airbus Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and Airbus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander and Airbus Group SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus Group SE and Banco 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 Banco Santander are associated (or correlated) with Airbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus Group SE has no effect on the direction of Banco Santander i.e., Banco Santander and Airbus Group go up and down completely randomly.
Pair Corralation between Banco Santander and Airbus Group
Assuming the 90 days trading horizon Banco Santander is expected to generate 1.23 times more return on investment than Airbus Group. However, Banco Santander is 1.23 times more volatile than Airbus Group SE. It trades about 0.06 of its potential returns per unit of risk. Airbus Group SE is currently generating about 0.04 per unit of risk. If you would invest 280.00 in Banco Santander on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Banco Santander or generate 58.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander vs. Airbus Group SE
Performance |
| Timeline |
| Banco Santander |
| Airbus Group SE |
Banco Santander and Airbus Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Airbus Group
The main advantage of trading using opposite Banco Santander and Airbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Airbus Group 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 Airbus Group will offset losses from the drop in Airbus Group's long position.| Banco Santander vs. Repsol | Banco Santander vs. Iberdrola SA | Banco Santander vs. Banco de Sabadell | Banco Santander vs. Caixabank SA |
| Airbus Group vs. Cellnex Telecom SA | Airbus Group vs. NH Hoteles | Airbus Group vs. Melia Hotels | Airbus Group vs. Atrys Health SL |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |