Correlation Between UniCredit SpA and Banco Santander
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA 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 UniCredit SpA and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Banco Santander SA, you can compare the effects of market volatilities on UniCredit SpA 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 UniCredit SpA with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Banco Santander.
Diversification Opportunities for UniCredit SpA and Banco Santander
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UniCredit and Banco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA i.e., UniCredit SpA and Banco Santander go up and down completely randomly.
Pair Corralation between UniCredit SpA and Banco Santander
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 2.54 times more return on investment than Banco Santander. However, UniCredit SpA is 2.54 times more volatile than Banco Santander SA. It trades about 0.07 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.06 per unit of risk. If you would invest 5,836 in UniCredit SpA on August 24, 2024 and sell it today you would earn a total of 10,544 from holding UniCredit SpA or generate 180.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.22% |
| Values | Daily Returns |
UniCredit SpA vs. Banco Santander SA
Performance |
| Timeline |
| UniCredit SpA |
| Banco Santander SA |
UniCredit SpA and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Banco Santander
The main advantage of trading using opposite UniCredit SpA and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA 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.| UniCredit SpA vs. Detalion Games SA | UniCredit SpA vs. TEN SQUARE GAMES | UniCredit SpA vs. PLAYWAY SA | UniCredit SpA vs. Gamedust 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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