Correlation Between Banco Santander and Inhome Prime
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Inhome Prime 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 Inhome Prime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander and Inhome Prime Properties, you can compare the effects of market volatilities on Banco Santander and Inhome Prime 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 Inhome Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Inhome Prime.
Diversification Opportunities for Banco Santander and Inhome Prime
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Banco and Inhome is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander and Inhome Prime Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhome Prime Properties 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 Inhome Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhome Prime Properties has no effect on the direction of Banco Santander i.e., Banco Santander and Inhome Prime go up and down completely randomly.
Pair Corralation between Banco Santander and Inhome Prime
Assuming the 90 days trading horizon Banco Santander is expected to generate 1.85 times more return on investment than Inhome Prime. However, Banco Santander is 1.85 times more volatile than Inhome Prime Properties. It trades about 0.08 of its potential returns per unit of risk. Inhome Prime Properties is currently generating about 0.09 per unit of risk. If you would invest 474.00 in Banco Santander on November 28, 2024 and sell it today you would earn a total of 131.00 from holding Banco Santander or generate 27.64% 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. Inhome Prime Properties
Performance |
| Timeline |
| Banco Santander |
| Inhome Prime Properties |
Banco Santander and Inhome Prime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Inhome Prime
The main advantage of trading using opposite Banco Santander and Inhome Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Inhome Prime 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 Inhome Prime will offset losses from the drop in Inhome Prime's long position.| Banco Santander vs. Repsol | Banco Santander vs. Iberdrola SA | Banco Santander vs. Banco de Sabadell | Banco Santander vs. Caixabank SA |
| Inhome Prime vs. All Iron Re | Inhome Prime vs. Technomeca Aerospace SA | Inhome Prime vs. Media Investment Optimization | Inhome Prime vs. Parlem Telecom Companyia |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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