Correlation Between Banco Santander and Millenium Hotels
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Millenium Hotels 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 Millenium Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander and Millenium Hotels Real, you can compare the effects of market volatilities on Banco Santander and Millenium Hotels 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 Millenium Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Millenium Hotels.
Diversification Opportunities for Banco Santander and Millenium Hotels
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Millenium is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander and Millenium Hotels Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millenium Hotels Real 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 Millenium Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millenium Hotels Real has no effect on the direction of Banco Santander i.e., Banco Santander and Millenium Hotels go up and down completely randomly.
Pair Corralation between Banco Santander and Millenium Hotels
Assuming the 90 days trading horizon Banco Santander is expected to generate 0.42 times more return on investment than Millenium Hotels. However, Banco Santander is 2.38 times less risky than Millenium Hotels. It trades about 0.06 of its potential returns per unit of risk. Millenium Hotels Real is currently generating about 0.01 per unit of risk. If you would invest 278.00 in Banco Santander on August 31, 2024 and sell it today you would earn a total of 160.00 from holding Banco Santander or generate 57.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.51% |
| Values | Daily Returns |
Banco Santander vs. Millenium Hotels Real
Performance |
| Timeline |
| Banco Santander |
| Millenium Hotels Real |
Banco Santander and Millenium Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Millenium Hotels
The main advantage of trading using opposite Banco Santander and Millenium Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Millenium Hotels 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 Millenium Hotels will offset losses from the drop in Millenium Hotels' long position.| Banco Santander vs. Banco de Sabadell | Banco Santander vs. Caixabank SA | Banco Santander vs. Acerinox | Banco Santander vs. ACS Actividades de |
| Millenium Hotels vs. Industria de Diseno | Millenium Hotels vs. Iberdrola SA | Millenium Hotels vs. Banco Santander | Millenium Hotels vs. Caixabank 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 CEOs Directory module to screen CEOs from public companies around the world.
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