Correlation Between SANTANDER and Baring Emerging
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Baring Emerging 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 Baring Emerging 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 Baring Emerging Europe, you can compare the effects of market volatilities on SANTANDER and Baring Emerging 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 Baring Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Baring Emerging.
Diversification Opportunities for SANTANDER and Baring Emerging
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SANTANDER and Baring is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Baring Emerging Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baring Emerging Europe 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 Baring Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baring Emerging Europe has no effect on the direction of SANTANDER i.e., SANTANDER and Baring Emerging go up and down completely randomly.
Pair Corralation between SANTANDER and Baring Emerging
Assuming the 90 days trading horizon SANTANDER is expected to generate 2254.0 times less return on investment than Baring Emerging. But when comparing it to its historical volatility, SANTANDER UK 8 is 6.35 times less risky than Baring Emerging. It trades about 0.0 of its potential returns per unit of risk. Baring Emerging Europe is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 59,750 in Baring Emerging Europe on September 12, 2024 and sell it today you would earn a total of 3,000 from holding Baring Emerging Europe or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANTANDER UK 8 vs. Baring Emerging Europe
Performance |
| Timeline |
| SANTANDER UK 8 |
| Baring Emerging Europe |
SANTANDER and Baring Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and Baring Emerging
The main advantage of trading using opposite SANTANDER and Baring Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Baring Emerging 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 Baring Emerging will offset losses from the drop in Baring Emerging's long position.| SANTANDER vs. Vulcan Materials Co | SANTANDER vs. Ryanair Holdings plc | SANTANDER vs. Morgan Advanced Materials | SANTANDER vs. Amedeo Air Four |
| Baring Emerging vs. Endeavour Mining Corp | Baring Emerging vs. Waste Management | Baring Emerging vs. Infrastrutture Wireless Italiane | Baring Emerging vs. Metals Exploration Plc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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