Correlation Between Saule Technologies and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Saule Technologies and Banco Santander 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 Saule Technologies and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saule Technologies SA and Banco Santander SA, you can compare the effects of market volatilities on Saule Technologies and Banco Santander 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 Saule Technologies with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saule Technologies and Banco Santander.
Diversification Opportunities for Saule Technologies and Banco Santander
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Saule and Banco is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Saule Technologies SA and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Saule Technologies 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 Saule Technologies SA are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of Saule Technologies i.e., Saule Technologies and Banco Santander go up and down completely randomly.
Pair Corralation between Saule Technologies and Banco Santander
Assuming the 90 days trading horizon Saule Technologies SA is expected to generate 2.78 times more return on investment than Banco Santander. However, Saule Technologies is 2.78 times more volatile than Banco Santander SA. It trades about 0.2 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.38 per unit of risk. If you would invest 120.00 in Saule Technologies SA on November 3, 2024 and sell it today you would earn a total of 18.00 from holding Saule Technologies SA or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Saule Technologies SA vs. Banco Santander SA
Performance |
| Timeline |
| Saule Technologies |
| Banco Santander SA |
Saule Technologies and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saule Technologies and Banco Santander
The main advantage of trading using opposite Saule Technologies and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saule Technologies position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Saule Technologies vs. Clean Carbon Energy | Saule Technologies vs. ADX | Saule Technologies vs. Agroliga Group PLC | Saule Technologies vs. Vee SA |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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