Correlation Between Schweizerische Nationalbank and Santos

Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank and Santos 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 Schweizerische Nationalbank and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Schweizerische Nationalbank and Santos, you can compare the effects of market volatilities on Schweizerische Nationalbank and Santos 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 Schweizerische Nationalbank with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Santos.

Diversification Opportunities for Schweizerische Nationalbank and Santos

0.67

Correlation Coefficient

Schweizerische Nationalbank  Santos

Poor diversification

The 3 months correlation between Schweizerische and Santos is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Santos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos and Schweizerische Nationalbank 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 Schweizerische Nationalbank are associated (or correlated) with Santos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santos has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Santos go up and down completely randomly.

Pair Corralation between Schweizerische Nationalbank and Santos

Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Santos. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 2.65 times less risky than Santos. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Santos is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  476.00  in Santos on September 17, 2024 and sell it today you would lose (56.00) from holding Santos or give up 11.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Schweizerische Nationalbank  vs.  Santos

Schweizerische Nationalbank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schweizerische Nationalbank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Santos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santos has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Schweizerische Nationalbank and Santos

The main advantage of trading using opposite Schweizerische Nationalbank and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank position performs unexpectedly, Santos 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 Santos will offset losses from the drop in Santos' long position.

The idea behind Schweizerische Nationalbank and Santos pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .