Correlation Between Banco Santander and Wielton SA
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Wielton 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 Wielton 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 Wielton SA, you can compare the effects of market volatilities on Banco Santander and Wielton 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 Wielton SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Wielton SA.
Diversification Opportunities for Banco Santander and Wielton SA
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Wielton is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Wielton SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wielton 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 Wielton SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wielton SA has no effect on the direction of Banco Santander i.e., Banco Santander and Wielton SA go up and down completely randomly.
Pair Corralation between Banco Santander and Wielton SA
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.92 times more return on investment than Wielton SA. However, Banco Santander SA is 1.09 times less risky than Wielton SA. It trades about 0.06 of its potential returns per unit of risk. Wielton SA is currently generating about -0.02 per unit of risk. If you would invest 1,225 in Banco Santander SA on August 26, 2024 and sell it today you would earn a total of 670.00 from holding Banco Santander SA or generate 54.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Banco Santander SA vs. Wielton SA
Performance |
| Timeline |
| Banco Santander SA |
| Wielton SA |
Banco Santander and Wielton SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Wielton SA
The main advantage of trading using opposite Banco Santander and Wielton SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Wielton 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 Wielton SA will offset losses from the drop in Wielton SA's 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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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