Correlation Between Banco Santander and Grupa HRC
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Grupa HRC 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 Grupa HRC 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 Grupa HRC SA, you can compare the effects of market volatilities on Banco Santander and Grupa HRC 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 Grupa HRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Grupa HRC.
Diversification Opportunities for Banco Santander and Grupa HRC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Grupa is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Grupa HRC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa HRC 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 Grupa HRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa HRC SA has no effect on the direction of Banco Santander i.e., Banco Santander and Grupa HRC go up and down completely randomly.
Pair Corralation between Banco Santander and Grupa HRC
Assuming the 90 days trading horizon Banco Santander is expected to generate 1.51 times less return on investment than Grupa HRC. But when comparing it to its historical volatility, Banco Santander SA is 4.52 times less risky than Grupa HRC. It trades about 0.06 of its potential returns per unit of risk. Grupa HRC SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Grupa HRC SA on September 2, 2024 and sell it today you would lose (25.00) from holding Grupa HRC SA or give up 22.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.04% |
| Values | Daily Returns |
Banco Santander SA vs. Grupa HRC SA
Performance |
| Timeline |
| Banco Santander SA |
| Grupa HRC SA |
Banco Santander and Grupa HRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Grupa HRC
The main advantage of trading using opposite Banco Santander and Grupa HRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Grupa HRC 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 Grupa HRC will offset losses from the drop in Grupa HRC's long position.| Banco Santander vs. True Games Syndicate | Banco Santander vs. Pyramid Games SA | Banco Santander vs. Cloud Technologies SA | Banco Santander vs. Creotech Instruments SA |
| Grupa HRC vs. UF Games SA | Grupa HRC vs. Mercator Medical SA | Grupa HRC vs. Immobile | Grupa HRC vs. Gamedust 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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