Correlation Between Banco Santander and HYDROTOR
Can any of the company-specific risk be diversified away by investing in both Banco Santander and HYDROTOR 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 HYDROTOR 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 HYDROTOR SA, you can compare the effects of market volatilities on Banco Santander and HYDROTOR 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 HYDROTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and HYDROTOR.
Diversification Opportunities for Banco Santander and HYDROTOR
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and HYDROTOR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and HYDROTOR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROTOR 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 HYDROTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROTOR SA has no effect on the direction of Banco Santander i.e., Banco Santander and HYDROTOR go up and down completely randomly.
Pair Corralation between Banco Santander and HYDROTOR
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.63 times more return on investment than HYDROTOR. However, Banco Santander SA is 1.6 times less risky than HYDROTOR. It trades about -0.04 of its potential returns per unit of risk. HYDROTOR SA is currently generating about -0.19 per unit of risk. If you would invest 1,931 in Banco Santander SA on August 30, 2024 and sell it today you would lose (38.00) from holding Banco Santander SA or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. HYDROTOR SA
Performance |
| Timeline |
| Banco Santander SA |
| HYDROTOR SA |
Banco Santander and HYDROTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and HYDROTOR
The main advantage of trading using opposite Banco Santander and HYDROTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, HYDROTOR 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 HYDROTOR will offset losses from the drop in HYDROTOR's long position.| Banco Santander vs. Alior Bank SA | Banco Santander vs. Asseco Business Solutions | Banco Santander vs. Detalion Games SA | Banco Santander vs. CFI Holding SA |
| HYDROTOR vs. Baked Games SA | HYDROTOR vs. TEN SQUARE GAMES | HYDROTOR vs. Road Studio SA | HYDROTOR vs. Marie Brizard Wine |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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