Correlation Between SANTANDER and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Tetragon Financial 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 Tetragon Financial 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 Tetragon Financial Group, you can compare the effects of market volatilities on SANTANDER and Tetragon Financial 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 Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Tetragon Financial.
Diversification Opportunities for SANTANDER and Tetragon Financial
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SANTANDER and Tetragon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial 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 Tetragon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tetragon Financial has no effect on the direction of SANTANDER i.e., SANTANDER and Tetragon Financial go up and down completely randomly.
Pair Corralation between SANTANDER and Tetragon Financial
Assuming the 90 days trading horizon SANTANDER UK 8 is expected to generate 0.36 times more return on investment than Tetragon Financial. However, SANTANDER UK 8 is 2.75 times less risky than Tetragon Financial. It trades about -0.04 of its potential returns per unit of risk. Tetragon Financial Group is currently generating about -0.41 per unit of risk. If you would invest 13,550 in SANTANDER UK 8 on November 9, 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 Against |
| Strength | Insignificant |
| Accuracy | 27.27% |
| Values | Daily Returns |
SANTANDER UK 8 vs. Tetragon Financial Group
Performance |
| Timeline |
| SANTANDER UK 8 |
| Tetragon Financial |
SANTANDER and Tetragon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and Tetragon Financial
The main advantage of trading using opposite SANTANDER and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Tetragon Financial 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 Tetragon Financial will offset losses from the drop in Tetragon Financial's long position.| SANTANDER vs. Sabien Technology Group | SANTANDER vs. Vitec Software Group | SANTANDER vs. BE Semiconductor Industries | SANTANDER vs. United Utilities Group |
| Tetragon Financial vs. URU Metals | Tetragon Financial vs. Blackrock World Mining | Tetragon Financial vs. Empire Metals Limited | Tetragon Financial vs. Coeur Mining |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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