Correlation Between Banco Santander and Shoper SA
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Shoper SA 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 Shoper SA 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 Shoper SA, you can compare the effects of market volatilities on Banco Santander and Shoper SA 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 Shoper SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Shoper SA.
Diversification Opportunities for Banco Santander and Shoper SA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Shoper is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Shoper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoper 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 Shoper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoper SA has no effect on the direction of Banco Santander i.e., Banco Santander and Shoper SA go up and down completely randomly.
Pair Corralation between Banco Santander and Shoper SA
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.54 times more return on investment than Shoper SA. However, Banco Santander SA is 1.86 times less risky than Shoper SA. It trades about 0.13 of its potential returns per unit of risk. Shoper SA is currently generating about -0.1 per unit of risk. If you would invest 1,934 in Banco Santander SA on September 13, 2024 and sell it today you would earn a total of 76.00 from holding Banco Santander SA or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Banco Santander SA vs. Shoper SA
Performance |
| Timeline |
| Banco Santander SA |
| Shoper SA |
Banco Santander and Shoper SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Shoper SA
The main advantage of trading using opposite Banco Santander and Shoper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Shoper SA 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 Shoper SA will offset losses from the drop in Shoper SA's long position.| Banco Santander vs. TEN SQUARE GAMES | Banco Santander vs. Gaming Factory SA | Banco Santander vs. Santander Bank Polska | Banco Santander vs. Varsav Game Studios |
| Shoper SA vs. MW Trade SA | Shoper SA vs. UF Games SA | Shoper SA vs. Monnari Trade SA | Shoper SA vs. Logintrade 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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