Correlation Between SANTANDER and Andrews Sykes
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Andrews Sykes 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 SANTANDER and Andrews Sykes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANTANDER UK 8 and Andrews Sykes Group, you can compare the effects of market volatilities on SANTANDER and Andrews Sykes 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 SANTANDER with a short position of Andrews Sykes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Andrews Sykes.
Diversification Opportunities for SANTANDER and Andrews Sykes
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SANTANDER and Andrews is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Andrews Sykes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andrews Sykes Group and 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 SANTANDER UK 8 are associated (or correlated) with Andrews Sykes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andrews Sykes Group has no effect on the direction of SANTANDER i.e., SANTANDER and Andrews Sykes go up and down completely randomly.
Pair Corralation between SANTANDER and Andrews Sykes
Assuming the 90 days trading horizon SANTANDER UK 8 is expected to generate 0.87 times more return on investment than Andrews Sykes. However, SANTANDER UK 8 is 1.15 times less risky than Andrews Sykes. It trades about 0.04 of its potential returns per unit of risk. Andrews Sykes Group is currently generating about -0.04 per unit of risk. If you would invest 12,411 in SANTANDER UK 8 on September 14, 2024 and sell it today you would earn a total of 1,139 from holding SANTANDER UK 8 or generate 9.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SANTANDER UK 8 vs. Andrews Sykes Group
Performance |
Timeline |
SANTANDER UK 8 |
Andrews Sykes Group |
SANTANDER and Andrews Sykes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SANTANDER and Andrews Sykes
The main advantage of trading using opposite SANTANDER and Andrews Sykes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Andrews Sykes 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 Andrews Sykes will offset losses from the drop in Andrews Sykes' long position.SANTANDER vs. Blackrock World Mining | SANTANDER vs. Odfjell Drilling | SANTANDER vs. Orient Telecoms | SANTANDER vs. Extra Space Storage |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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