Correlation Between Banco Santander and Oberbank
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Oberbank 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 Oberbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander SA and Oberbank AG, you can compare the effects of market volatilities on Banco Santander and Oberbank 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 Oberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Oberbank.
Diversification Opportunities for Banco Santander and Oberbank
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Oberbank is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank AG 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 SA are associated (or correlated) with Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of Banco Santander i.e., Banco Santander and Oberbank go up and down completely randomly.
Pair Corralation between Banco Santander and Oberbank
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 20.76 times more return on investment than Oberbank. However, Banco Santander is 20.76 times more volatile than Oberbank AG. It trades about 0.48 of its potential returns per unit of risk. Oberbank AG is currently generating about 0.21 per unit of risk. If you would invest 437.00 in Banco Santander SA on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Banco Santander SA or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. Oberbank AG
Performance |
| Timeline |
| Banco Santander SA |
| Oberbank AG |
Banco Santander and Oberbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Oberbank
The main advantage of trading using opposite Banco Santander and Oberbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Oberbank 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 Oberbank will offset losses from the drop in Oberbank's long position.| Banco Santander vs. Oberbank AG | Banco Santander vs. AMAG Austria Metall | Banco Santander vs. BKS Bank AG | Banco Santander vs. UNIQA Insurance Group |
| Oberbank vs. RATH Aktiengesellschaft | Oberbank vs. AT S Austria | Oberbank vs. BAWAG Group AG | Oberbank vs. Semperit Aktiengesellschaft Holding |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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