Correlation Between Banco Santander and Exxon
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Exxon 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 Exxon 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 Exxon Mobil Corp, you can compare the effects of market volatilities on Banco Santander and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Exxon.
Diversification Opportunities for Banco Santander and Exxon
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Banco and Exxon is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Banco Santander i.e., Banco Santander and Exxon go up and down completely randomly.
Pair Corralation between Banco Santander and Exxon
Considering the 90-day investment horizon Banco Santander SA is expected to generate 1.63 times more return on investment than Exxon. However, Banco Santander is 1.63 times more volatile than Exxon Mobil Corp. It trades about 0.38 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.46 per unit of risk. If you would invest 409.00 in Banco Santander SA on January 25, 2024 and sell it today you would earn a total of 90.00 from holding Banco Santander SA or generate 22.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Banco Santander SA vs. Exxon Mobil Corp
Performance |
Timeline |
Banco Santander SA |
Exxon Mobil Corp |
Banco Santander and Exxon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Santander and Exxon
The main advantage of trading using opposite Banco Santander and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon'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 |
Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |