Correlation Between SANTANDER and Lowland Investment
Can any of the company-specific risk be diversified away by investing in both SANTANDER and Lowland Investment 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 SANTANDER and Lowland Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANTANDER UK 8 and Lowland Investment Co, you can compare the effects of market volatilities on SANTANDER and Lowland Investment 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 SANTANDER with a short position of Lowland Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Lowland Investment.
Diversification Opportunities for SANTANDER and Lowland Investment
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SANTANDER and Lowland is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 and Lowland Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowland Investment and 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 SANTANDER UK 8 are associated (or correlated) with Lowland Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowland Investment has no effect on the direction of SANTANDER i.e., SANTANDER and Lowland Investment go up and down completely randomly.
Pair Corralation between SANTANDER and Lowland Investment
Assuming the 90 days trading horizon SANTANDER is expected to generate 177.0 times less return on investment than Lowland Investment. But when comparing it to its historical volatility, SANTANDER UK 8 is 5.39 times less risky than Lowland Investment. It trades about 0.0 of its potential returns per unit of risk. Lowland Investment Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,641 in Lowland Investment Co on September 11, 2024 and sell it today you would earn a total of 109.00 from holding Lowland Investment Co or generate 0.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SANTANDER UK 8 vs. Lowland Investment Co
Performance |
Timeline |
SANTANDER UK 8 |
Lowland Investment |
SANTANDER and Lowland Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SANTANDER and Lowland Investment
The main advantage of trading using opposite SANTANDER and Lowland Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, Lowland Investment 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 Lowland Investment will offset losses from the drop in Lowland Investment's long position.SANTANDER vs. Broadcom | SANTANDER vs. Roadside Real Estate | SANTANDER vs. Lindsell Train Investment | SANTANDER vs. Games Workshop Group |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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