Correlation Between SANTANDER and Worldwide Healthcare
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Worldwide Healthcare 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 Worldwide Healthcare 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 Worldwide Healthcare Trust, you can compare the effects of market volatilities on SANTANDER and Worldwide Healthcare 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 Worldwide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Worldwide Healthcare.
Diversification Opportunities for SANTANDER and Worldwide Healthcare
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between SANTANDER and Worldwide is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Worldwide Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldwide Healthcare 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 Worldwide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldwide Healthcare has no effect on the direction of SANTANDER i.e., SANTANDER and Worldwide Healthcare go up and down completely randomly.
Pair Corralation between SANTANDER and Worldwide Healthcare
Assuming the 90 days trading horizon SANTANDER UK 8 is expected to generate 0.85 times more return on investment than Worldwide Healthcare. However, SANTANDER UK 8 is 1.17 times less risky than Worldwide Healthcare. It trades about 0.07 of its potential returns per unit of risk. Worldwide Healthcare Trust is currently generating about 0.03 per unit of risk. If you would invest 10,502 in SANTANDER UK 8 on September 12, 2024 and sell it today you would earn a total of 3,048 from holding SANTANDER UK 8 or generate 29.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANTANDER UK 8 vs. Worldwide Healthcare Trust
Performance |
| Timeline |
| SANTANDER UK 8 |
| Worldwide Healthcare |
SANTANDER and Worldwide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and Worldwide Healthcare
The main advantage of trading using opposite SANTANDER and Worldwide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Worldwide Healthcare 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 Worldwide Healthcare will offset losses from the drop in Worldwide Healthcare's long position.| SANTANDER vs. Vulcan Materials Co | SANTANDER vs. Ryanair Holdings plc | SANTANDER vs. Morgan Advanced Materials | SANTANDER vs. Amedeo Air Four |
| Worldwide Healthcare vs. Westlake Chemical Corp | Worldwide Healthcare vs. American Homes 4 | Worldwide Healthcare vs. International Consolidated Airlines | Worldwide Healthcare vs. Arrow Electronics |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |