Correlation Between Banco Santander and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Alibaba 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 Banco Santander and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander SA and Alibaba Group Holding, you can compare the effects of market volatilities on Banco Santander and Alibaba 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 Banco Santander with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Alibaba Group.
Diversification Opportunities for Banco Santander and Alibaba Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and Alibaba is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding and Banco 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 Banco Santander SA are associated (or correlated) with Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Banco Santander i.e., Banco Santander and Alibaba Group go up and down completely randomly.
Pair Corralation between Banco Santander and Alibaba Group
If you would invest 16,723 in Banco Santander SA on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Banco Santander SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. Alibaba Group Holding
Performance |
| Timeline |
| Banco Santander SA |
| Alibaba Group Holding |
Banco Santander and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Alibaba Group
The main advantage of trading using opposite Banco Santander and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Alibaba 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.| Banco Santander vs. Alibaba Group Holding | Banco Santander vs. Apple Inc DRC | Banco Santander vs. Alphabet Inc Class A CEDEAR | Banco Santander vs. Amazon Inc |
| Alibaba Group vs. Amazon Inc | Alibaba Group vs. Edesa Holding SA | Alibaba Group vs. Vista Energy, SAB | Alibaba Group vs. American Express Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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