Correlation Between SANTANDER and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on SANTANDER and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Bankers Investment.
Diversification Opportunities for SANTANDER and Bankers Investment
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SANTANDER and Bankers is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of SANTANDER i.e., SANTANDER and Bankers Investment go up and down completely randomly.
Pair Corralation between SANTANDER and Bankers Investment
Assuming the 90 days trading horizon SANTANDER is expected to generate 483.0 times less return on investment than Bankers Investment. But when comparing it to its historical volatility, SANTANDER UK 8 is 4.31 times less risky than Bankers Investment. It trades about 0.0 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11,520 in Bankers Investment Trust on September 13, 2024 and sell it today you would earn a total of 120.00 from holding Bankers Investment Trust or generate 1.04% 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. Bankers Investment Trust
Performance |
| Timeline |
| SANTANDER UK 8 |
| Bankers Investment Trust |
SANTANDER and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and Bankers Investment
The main advantage of trading using opposite SANTANDER and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| SANTANDER vs. GreenX Metals | SANTANDER vs. Games Workshop Group | SANTANDER vs. Systemair AB | SANTANDER vs. Gaming Realms plc |
| Bankers Investment vs. Catalyst Media Group | Bankers Investment vs. CATLIN GROUP | Bankers Investment vs. Tamburi Investment Partners | Bankers Investment vs. Magnora ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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