Correlation Between Santander Bank and Noble Financials
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Noble Financials 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 Bank and Noble Financials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santander Bank Polska and Noble Financials SA, you can compare the effects of market volatilities on Santander Bank and Noble Financials 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 Bank with a short position of Noble Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Noble Financials.
Diversification Opportunities for Santander Bank and Noble Financials
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Santander and Noble is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Noble Financials SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Financials and Santander Bank 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 Bank Polska are associated (or correlated) with Noble Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Financials has no effect on the direction of Santander Bank i.e., Santander Bank and Noble Financials go up and down completely randomly.
Pair Corralation between Santander Bank and Noble Financials
Assuming the 90 days trading horizon Santander Bank is expected to generate 3.23 times less return on investment than Noble Financials. In addition to that, Santander Bank is 1.12 times more volatile than Noble Financials SA. It trades about 0.22 of its total potential returns per unit of risk. Noble Financials SA is currently generating about 0.79 per unit of volatility. If you would invest 7,280 in Noble Financials SA on October 24, 2024 and sell it today you would earn a total of 1,120 from holding Noble Financials SA or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Noble Financials SA
Performance |
| Timeline |
| Santander Bank Polska |
| Noble Financials |
Santander Bank and Noble Financials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Noble Financials
The main advantage of trading using opposite Santander Bank and Noble Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Noble Financials 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 Noble Financials will offset losses from the drop in Noble Financials' long position.| Santander Bank vs. CI Games SA | Santander Bank vs. Mlk Foods Public | Santander Bank vs. Creativeforge Games SA | Santander Bank vs. SOFTWARE MANSION SPOLKA |
| Noble Financials vs. LSI Software SA | Noble Financials vs. Enter Air SA | Noble Financials vs. M Food SA | Noble Financials vs. Santander Bank Polska |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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