Correlation Between Banco Santander and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both Banco Santander and AMAG Austria 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 AMAG Austria 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 AMAG Austria Metall, you can compare the effects of market volatilities on Banco Santander and AMAG Austria 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 AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and AMAG Austria.
Diversification Opportunities for Banco Santander and AMAG Austria
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and AMAG is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Banco Santander i.e., Banco Santander and AMAG Austria go up and down completely randomly.
Pair Corralation between Banco Santander and AMAG Austria
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.99 times more return on investment than AMAG Austria. However, Banco Santander SA is 1.01 times less risky than AMAG Austria. It trades about 0.14 of its potential returns per unit of risk. AMAG Austria Metall is currently generating about -0.06 per unit of risk. If you would invest 442.00 in Banco Santander SA on February 2, 2024 and sell it today you would earn a total of 22.00 from holding Banco Santander SA or generate 4.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Banco Santander SA vs. AMAG Austria Metall
Performance |
Timeline |
Banco Santander SA |
AMAG Austria Metall |
Banco Santander and AMAG Austria Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Santander and AMAG Austria
The main advantage of trading using opposite Banco Santander and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.Banco Santander vs. Vienna Insurance Group | Banco Santander vs. Addiko Bank AG | Banco Santander vs. UNIQA Insurance Group | Banco Santander vs. Erste Group Bank |
AMAG Austria vs. Lenzing Aktiengesellschaft | AMAG Austria vs. Voestalpine AG | AMAG Austria vs. EVN AG | AMAG Austria vs. Facc AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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