Correlation Between Banco Santander and Vigo System
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Vigo System 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 Vigo System 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 Vigo System SA, you can compare the effects of market volatilities on Banco Santander and Vigo System 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 Vigo System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Vigo System.
Diversification Opportunities for Banco Santander and Vigo System
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Vigo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Vigo System SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vigo System 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 Vigo System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vigo System SA has no effect on the direction of Banco Santander i.e., Banco Santander and Vigo System go up and down completely randomly.
Pair Corralation between Banco Santander and Vigo System
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 1.02 times more return on investment than Vigo System. However, Banco Santander is 1.02 times more volatile than Vigo System SA. It trades about -0.1 of its potential returns per unit of risk. Vigo System SA is currently generating about -0.21 per unit of risk. If you would invest 1,975 in Banco Santander SA on August 29, 2024 and sell it today you would lose (82.00) from holding Banco Santander SA or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. Vigo System SA
Performance |
| Timeline |
| Banco Santander SA |
| Vigo System SA |
Banco Santander and Vigo System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Vigo System
The main advantage of trading using opposite Banco Santander and Vigo System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Vigo System 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 Vigo System will offset losses from the drop in Vigo System's long position.| Banco Santander vs. Alior Bank SA | Banco Santander vs. Asseco Business Solutions | Banco Santander vs. Detalion Games SA | Banco Santander vs. CFI Holding SA |
| Vigo System vs. Banco Santander SA | Vigo System vs. UniCredit SpA | Vigo System vs. CEZ as | Vigo System 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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