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
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SANTANDER and Bankers is -0.85. 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 UK 8 is expected to under-perform the Bankers Investment. But the stock apears to be less risky and, when comparing its historical volatility, SANTANDER UK 8 is 3.81 times less risky than Bankers Investment. The stock trades about -0.4 of its potential returns per unit of risk. The Bankers Investment Trust is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 11,676 in Bankers Investment Trust on November 5, 2024 and sell it today you would earn a total of 864.00 from holding Bankers Investment Trust or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| 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. Morgan Advanced Materials | SANTANDER vs. Rheinmetall AG | SANTANDER vs. Summit Materials Cl | SANTANDER vs. British American Tobacco |
| Bankers Investment vs. Inspiration Healthcare Group | Bankers Investment vs. MTI Wireless Edge | Bankers Investment vs. Verizon Communications | Bankers Investment vs. Planet Fitness Cl |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |