Correlation Between Ross Stores and SANTANDER

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

By analyzing existing cross correlation between Ross Stores and SANTANDER UK 8, you can compare the effects of market volatilities on Ross Stores and SANTANDER 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 Ross Stores with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and SANTANDER.

Diversification Opportunities for Ross Stores and SANTANDER

-0.8

Correlation Coefficient

Ross Stores  SANTANDER

Pay attention - limited upside

The 3 months correlation between Ross and SANTANDER is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and SANTANDER UK 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 8 and Ross Stores 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 Ross Stores are associated (or correlated) with SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 8 has no effect on the direction of Ross Stores i.e., Ross Stores and SANTANDER go up and down completely randomly.

Pair Corralation between Ross Stores and SANTANDER

Assuming the 90 days trading horizon Ross Stores is expected to under-perform the SANTANDER. In addition to that, Ross Stores is 3.07 times more volatile than SANTANDER UK 8. It trades about -0.22 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.14 per unit of volatility. If you would invest  13,219  in SANTANDER UK 8 on December 24, 2024 and sell it today you would earn a total of  481.00  from holding SANTANDER UK 8 or generate 3.64% return on investment over 90 days.

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

Ross Stores  vs.  SANTANDER UK 8

Ross Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ross Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SANTANDER UK 8

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANTANDER UK 8 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SANTANDER is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ross Stores and SANTANDER

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

The idea behind Ross Stores and SANTANDER UK 8 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.