Correlation Between SANTANDER and Physiomics Plc
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Physiomics Plc 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 Physiomics Plc 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 Physiomics Plc, you can compare the effects of market volatilities on SANTANDER and Physiomics Plc 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 Physiomics Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Physiomics Plc.
Diversification Opportunities for SANTANDER and Physiomics Plc
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SANTANDER and Physiomics is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Physiomics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Physiomics Plc 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 Physiomics Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Physiomics Plc has no effect on the direction of SANTANDER i.e., SANTANDER and Physiomics Plc go up and down completely randomly.
Pair Corralation between SANTANDER and Physiomics Plc
Assuming the 90 days trading horizon SANTANDER UK 8 is expected to under-perform the Physiomics Plc. But the stock apears to be less risky and, when comparing its historical volatility, SANTANDER UK 8 is 30.65 times less risky than Physiomics Plc. The stock trades about -0.18 of its potential returns per unit of risk. The Physiomics Plc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Physiomics Plc on October 26, 2024 and sell it today you would earn a total of 47.00 from holding Physiomics Plc or generate 69.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANTANDER UK 8 vs. Physiomics Plc
Performance |
| Timeline |
| SANTANDER UK 8 |
| Physiomics Plc |
SANTANDER and Physiomics Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and Physiomics Plc
The main advantage of trading using opposite SANTANDER and Physiomics Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Physiomics Plc 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 Physiomics Plc will offset losses from the drop in Physiomics Plc's long position.| SANTANDER vs. Livermore Investments Group | SANTANDER vs. Seraphim Space Investment | SANTANDER vs. New Residential Investment | SANTANDER vs. Smithson Investment Trust |
| Physiomics Plc vs. SupplyMe Capital PLC | Physiomics Plc vs. Lloyds Banking Group | Physiomics Plc vs. Premier African Minerals | Physiomics Plc vs. SANTANDER UK 8 |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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