Correlation Between Banco Santander and Hydrapres
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Hydrapres 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 Hydrapres 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 Hydrapres, you can compare the effects of market volatilities on Banco Santander and Hydrapres 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 Hydrapres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Hydrapres.
Diversification Opportunities for Banco Santander and Hydrapres
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and Hydrapres is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Hydrapres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrapres 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 Hydrapres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrapres has no effect on the direction of Banco Santander i.e., Banco Santander and Hydrapres go up and down completely randomly.
Pair Corralation between Banco Santander and Hydrapres
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 1.1 times more return on investment than Hydrapres. However, Banco Santander is 1.1 times more volatile than Hydrapres. It trades about 0.38 of its potential returns per unit of risk. Hydrapres is currently generating about 0.39 per unit of risk. If you would invest 2,058 in Banco Santander SA on November 28, 2024 and sell it today you would earn a total of 473.00 from holding Banco Santander SA or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Banco Santander SA vs. Hydrapres
Performance |
| Timeline |
| Banco Santander SA |
| Hydrapres |
Banco Santander and Hydrapres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Hydrapres
The main advantage of trading using opposite Banco Santander and Hydrapres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Hydrapres 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 Hydrapres will offset losses from the drop in Hydrapres' long position.| Banco Santander vs. Saule Technologies SA | Banco Santander vs. Skyline Investment SA | Banco Santander vs. Echo Investment SA | Banco Santander vs. GreenX Metals |
| Hydrapres vs. CI Games SA | Hydrapres vs. All In Games | Hydrapres vs. MW Trade SA | Hydrapres 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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