Correlation Between Banco Santander and Salesforce
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Salesforce 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 Salesforce 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 Salesforce, you can compare the effects of market volatilities on Banco Santander and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Salesforce.
Diversification Opportunities for Banco Santander and Salesforce
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Banco and Salesforce is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Banco Santander i.e., Banco Santander and Salesforce go up and down completely randomly.
Pair Corralation between Banco Santander and Salesforce
Considering the 90-day investment horizon Banco Santander SA is expected to generate 0.73 times more return on investment than Salesforce. However, Banco Santander SA is 1.36 times less risky than Salesforce. It trades about 0.15 of its potential returns per unit of risk. Salesforce is currently generating about -0.22 per unit of risk. If you would invest 476.00 in Banco Santander SA on January 25, 2024 and sell it today you would earn a total of 23.00 from holding Banco Santander SA or generate 4.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Banco Santander SA vs. Salesforce
Performance |
Timeline |
Banco Santander SA |
Salesforce |
Banco Santander and Salesforce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Santander and Salesforce
The main advantage of trading using opposite Banco Santander and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.Banco Santander vs. Barclays PLC ADR | Banco Santander vs. ING Group NV | Banco Santander vs. HSBC Holdings PLC | Banco Santander vs. Natwest Group PLC |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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