Correlation Between Triton Development and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Triton Development 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 Triton Development and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triton Development SA and Banco Santander SA, you can compare the effects of market volatilities on Triton Development 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 Triton Development with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton Development and Banco Santander.
Diversification Opportunities for Triton Development and Banco Santander
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Triton and Banco is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Triton Development 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 Triton Development 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 Triton Development 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 Triton Development i.e., Triton Development and Banco Santander go up and down completely randomly.
Pair Corralation between Triton Development and Banco Santander
Assuming the 90 days trading horizon Triton Development SA is expected to under-perform the Banco Santander. In addition to that, Triton Development is 2.69 times more volatile than Banco Santander SA. It trades about -0.04 of its total potential returns per unit of risk. Banco Santander SA is currently generating about -0.02 per unit of volatility. If you would invest 2,023 in Banco Santander SA on September 1, 2024 and sell it today you would lose (145.00) from holding Banco Santander SA or give up 7.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Triton Development SA vs. Banco Santander SA
Performance |
| Timeline |
| Triton Development |
| Banco Santander SA |
Triton Development and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triton Development and Banco Santander
The main advantage of trading using opposite Triton Development and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton Development 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.| Triton Development vs. Banco Santander SA | Triton Development vs. UniCredit SpA | Triton Development vs. CEZ as | Triton Development vs. Polski Koncern Naftowy |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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