Correlation Between Banco Santander and Arteche Lantegi
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Arteche Lantegi 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 Arteche Lantegi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander and Arteche Lantegi Elkartea, you can compare the effects of market volatilities on Banco Santander and Arteche Lantegi 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 Arteche Lantegi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Arteche Lantegi.
Diversification Opportunities for Banco Santander and Arteche Lantegi
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and Arteche is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander and Arteche Lantegi Elkartea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arteche Lantegi Elkartea 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 Arteche Lantegi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arteche Lantegi Elkartea has no effect on the direction of Banco Santander i.e., Banco Santander and Arteche Lantegi go up and down completely randomly.
Pair Corralation between Banco Santander and Arteche Lantegi
Assuming the 90 days trading horizon Banco Santander is expected to generate 13.29 times less return on investment than Arteche Lantegi. But when comparing it to its historical volatility, Banco Santander is 1.43 times less risky than Arteche Lantegi. It trades about 0.02 of its potential returns per unit of risk. Arteche Lantegi Elkartea is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 640.00 in Arteche Lantegi Elkartea on October 15, 2024 and sell it today you would earn a total of 155.00 from holding Arteche Lantegi Elkartea or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander vs. Arteche Lantegi Elkartea
Performance |
| Timeline |
| Banco Santander |
| Arteche Lantegi Elkartea |
Banco Santander and Arteche Lantegi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Arteche Lantegi
The main advantage of trading using opposite Banco Santander and Arteche Lantegi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Arteche Lantegi 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 Arteche Lantegi will offset losses from the drop in Arteche Lantegi's long position.| Banco Santander vs. Repsol | Banco Santander vs. Iberdrola SA | Banco Santander vs. Banco de Sabadell | Banco Santander vs. Caixabank SA |
| Arteche Lantegi vs. Vytrus Biotech SA | Arteche Lantegi vs. Tier1 Technology SA | Arteche Lantegi vs. Cellnex Telecom SA | Arteche Lantegi vs. Arrienda Rental Properties |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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