Correlation Between Banco Santander and Atal SA
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Atal SA 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 Atal SA 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 Atal SA, you can compare the effects of market volatilities on Banco Santander and Atal SA 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 Atal SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Atal SA.
Diversification Opportunities for Banco Santander and Atal SA
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Banco and Atal is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Atal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atal 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 SA are associated (or correlated) with Atal SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atal SA has no effect on the direction of Banco Santander i.e., Banco Santander and Atal SA go up and down completely randomly.
Pair Corralation between Banco Santander and Atal SA
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 1.02 times more return on investment than Atal SA. However, Banco Santander is 1.02 times more volatile than Atal SA. It trades about 0.1 of its potential returns per unit of risk. Atal SA is currently generating about 0.04 per unit of risk. If you would invest 1,827 in Banco Santander SA on September 12, 2024 and sell it today you would earn a total of 173.00 from holding Banco Santander SA or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. Atal SA
Performance |
| Timeline |
| Banco Santander SA |
| Atal SA |
Banco Santander and Atal SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Atal SA
The main advantage of trading using opposite Banco Santander and Atal SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Atal SA 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 Atal SA will offset losses from the drop in Atal SA's long position.| Banco Santander vs. Alior Bank SA | Banco Santander vs. Asseco Business Solutions | Banco Santander vs. Detalion Games SA | Banco Santander vs. Asseco South Eastern |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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