Correlation Between Banco Santander and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Cellnex Telecom 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 Cellnex Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander and Cellnex Telecom SA, you can compare the effects of market volatilities on Banco Santander and Cellnex Telecom 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 Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Cellnex Telecom.
Diversification Opportunities for Banco Santander and Cellnex Telecom
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banco and Cellnex is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander and Cellnex Telecom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellnex Telecom SA 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 Cellnex Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellnex Telecom SA has no effect on the direction of Banco Santander i.e., Banco Santander and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Banco Santander and Cellnex Telecom
Assuming the 90 days trading horizon Banco Santander is expected to generate 0.59 times more return on investment than Cellnex Telecom. However, Banco Santander is 1.68 times less risky than Cellnex Telecom. It trades about 0.42 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.09 per unit of risk. If you would invest 440.00 in Banco Santander on November 3, 2024 and sell it today you would earn a total of 56.00 from holding Banco Santander or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander vs. Cellnex Telecom SA
Performance |
| Timeline |
| Banco Santander |
| Cellnex Telecom SA |
Banco Santander and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Cellnex Telecom
The main advantage of trading using opposite Banco Santander and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Cellnex Telecom 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 Cellnex Telecom will offset losses from the drop in Cellnex Telecom's long position.| Banco Santander vs. Repsol | Banco Santander vs. Iberdrola SA | Banco Santander vs. Banco de Sabadell | Banco Santander vs. Caixabank SA |
| Cellnex Telecom vs. Grifols SA | Cellnex Telecom vs. Aena SA | Cellnex Telecom vs. ACS Actividades de | Cellnex Telecom vs. Ferrovial SA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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