Correlation Between SANTANDER and Microlise Group
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Microlise Group 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 Microlise Group 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 Microlise Group PLC, you can compare the effects of market volatilities on SANTANDER and Microlise Group 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 Microlise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Microlise Group.
Diversification Opportunities for SANTANDER and Microlise Group
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SANTANDER and Microlise is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Microlise Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microlise Group 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 Microlise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microlise Group PLC has no effect on the direction of SANTANDER i.e., SANTANDER and Microlise Group go up and down completely randomly.
Pair Corralation between SANTANDER and Microlise Group
Assuming the 90 days trading horizon SANTANDER UK 8 is expected to generate 0.06 times more return on investment than Microlise Group. However, SANTANDER UK 8 is 17.84 times less risky than Microlise Group. It trades about -0.08 of its potential returns per unit of risk. Microlise Group PLC is currently generating about -0.08 per unit of risk. If you would invest 13,600 in SANTANDER UK 8 on September 2, 2024 and sell it today you would lose (50.00) from holding SANTANDER UK 8 or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANTANDER UK 8 vs. Microlise Group PLC
Performance |
| Timeline |
| SANTANDER UK 8 |
| Microlise Group PLC |
SANTANDER and Microlise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and Microlise Group
The main advantage of trading using opposite SANTANDER and Microlise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Microlise Group 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 Microlise Group will offset losses from the drop in Microlise Group's long position.| SANTANDER vs. CNH Industrial NV | SANTANDER vs. PureTech Health plc | SANTANDER vs. Roper Technologies | SANTANDER vs. Jacquet Metal Service |
| Microlise Group vs. SupplyMe Capital PLC | Microlise Group vs. Lloyds Banking Group | Microlise Group vs. Premier African Minerals | Microlise Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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