Correlation Between Banco Santander and Noble Financials
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Noble Financials 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 Noble Financials 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 Noble Financials SA, you can compare the effects of market volatilities on Banco Santander and Noble Financials 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 Noble Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Noble Financials.
Diversification Opportunities for Banco Santander and Noble Financials
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Noble is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Noble Financials SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Financials 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 Noble Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Financials has no effect on the direction of Banco Santander i.e., Banco Santander and Noble Financials go up and down completely randomly.
Pair Corralation between Banco Santander and Noble Financials
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.48 times more return on investment than Noble Financials. However, Banco Santander SA is 2.08 times less risky than Noble Financials. It trades about -0.06 of its potential returns per unit of risk. Noble Financials SA is currently generating about -0.06 per unit of risk. If you would invest 1,975 in Banco Santander SA on August 28, 2024 and sell it today you would lose (48.00) from holding Banco Santander SA or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. Noble Financials SA
Performance |
| Timeline |
| Banco Santander SA |
| Noble Financials |
Banco Santander and Noble Financials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Noble Financials
The main advantage of trading using opposite Banco Santander and Noble Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Noble Financials 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 Noble Financials will offset losses from the drop in Noble Financials' long position.| Banco Santander vs. Asseco Business Solutions | Banco Santander vs. Detalion Games SA | Banco Santander vs. Asseco South Eastern | Banco Santander vs. Movie Games SA |
| Noble Financials vs. Saule Technologies SA | Noble Financials vs. CI Games SA | Noble Financials vs. New Tech Venture | Noble Financials vs. Mlk Foods Public |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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