Correlation Between Tsingtao Brewery and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery 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 Tsingtao Brewery and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and Banco Santander SA, you can compare the effects of market volatilities on Tsingtao Brewery 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 Tsingtao Brewery with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Banco Santander.
Diversification Opportunities for Tsingtao Brewery and Banco Santander
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tsingtao and Banco is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery 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 Tsingtao Brewery 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 Tsingtao Brewery 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 Tsingtao Brewery i.e., Tsingtao Brewery and Banco Santander go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Banco Santander
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 1.39 times less return on investment than Banco Santander. In addition to that, Tsingtao Brewery is 1.84 times more volatile than Banco Santander SA. It trades about 0.03 of its total potential returns per unit of risk. Banco Santander SA is currently generating about 0.07 per unit of volatility. If you would invest 250.00 in Banco Santander SA on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Banco Santander SA or generate 72.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. Banco Santander SA
Performance |
| Timeline |
| Tsingtao Brewery |
| Banco Santander SA |
Tsingtao Brewery and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Banco Santander
The main advantage of trading using opposite Tsingtao Brewery and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery 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.| Tsingtao Brewery vs. Siamgas And Petrochemicals | Tsingtao Brewery vs. MELIA HOTELS | Tsingtao Brewery vs. JAPAN AIRLINES | Tsingtao Brewery vs. MIRAMAR HOTEL INV |
| Banco Santander vs. Jacquet Metal Service | Banco Santander vs. LION ONE METALS | Banco Santander vs. Charter Communications | Banco Santander vs. Algonquin Power Utilities |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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