Correlation Between Banco Santander and Selena FM
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Selena FM 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 Selena FM 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 Selena FM SA, you can compare the effects of market volatilities on Banco Santander and Selena FM 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 Selena FM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Selena FM.
Diversification Opportunities for Banco Santander and Selena FM
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Selena is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Selena FM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selena FM 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 Selena FM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selena FM SA has no effect on the direction of Banco Santander i.e., Banco Santander and Selena FM go up and down completely randomly.
Pair Corralation between Banco Santander and Selena FM
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.8 times more return on investment than Selena FM. However, Banco Santander SA is 1.25 times less risky than Selena FM. It trades about -0.02 of its potential returns per unit of risk. Selena FM SA is currently generating about -0.05 per unit of risk. If you would invest 2,023 in Banco Santander SA on September 1, 2024 and sell it today you would lose (145.00) from holding Banco Santander SA or give up 7.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Banco Santander SA vs. Selena FM SA
Performance |
| Timeline |
| Banco Santander SA |
| Selena FM SA |
Banco Santander and Selena FM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Selena FM
The main advantage of trading using opposite Banco Santander and Selena FM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Selena FM 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 Selena FM will offset losses from the drop in Selena FM's long position.| Banco Santander vs. Quantum Software SA | Banco Santander vs. New Tech Venture | Banco Santander vs. Enter Air SA | Banco Santander vs. BNP Paribas Bank |
| Selena FM vs. Banco Santander SA | Selena FM vs. UniCredit SpA | Selena FM vs. CEZ as | Selena FM vs. Polski Koncern Naftowy |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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