Correlation Between Banco Santander and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Naturhouse Health 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 Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander and Naturhouse Health SA, you can compare the effects of market volatilities on Banco Santander and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Naturhouse Health.
Diversification Opportunities for Banco Santander and Naturhouse Health
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Naturhouse is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Banco Santander i.e., Banco Santander and Naturhouse Health go up and down completely randomly.
Pair Corralation between Banco Santander and Naturhouse Health
Assuming the 90 days trading horizon Banco Santander is expected to generate 0.84 times more return on investment than Naturhouse Health. However, Banco Santander is 1.2 times less risky than Naturhouse Health. It trades about 0.07 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.02 per unit of risk. If you would invest 302.00 in Banco Santander on August 31, 2024 and sell it today you would earn a total of 136.00 from holding Banco Santander or generate 45.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Banco Santander vs. Naturhouse Health SA
Performance |
| Timeline |
| Banco Santander |
| Naturhouse Health |
Banco Santander and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Naturhouse Health
The main advantage of trading using opposite Banco Santander and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Banco Santander vs. Banco de Sabadell | Banco Santander vs. Caixabank SA | Banco Santander vs. Acerinox | Banco Santander vs. ACS Actividades de |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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