Correlation Between Banco Santander and TEXAS ROADHOUSE
Can any of the company-specific risk be diversified away by investing in both Banco Santander and TEXAS ROADHOUSE 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 TEXAS ROADHOUSE 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 TEXAS ROADHOUSE, you can compare the effects of market volatilities on Banco Santander and TEXAS ROADHOUSE 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 TEXAS ROADHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and TEXAS ROADHOUSE.
Diversification Opportunities for Banco Santander and TEXAS ROADHOUSE
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Banco and TEXAS is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and TEXAS ROADHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEXAS ROADHOUSE 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 TEXAS ROADHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEXAS ROADHOUSE has no effect on the direction of Banco Santander i.e., Banco Santander and TEXAS ROADHOUSE go up and down completely randomly.
Pair Corralation between Banco Santander and TEXAS ROADHOUSE
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 1.17 times more return on investment than TEXAS ROADHOUSE. However, Banco Santander is 1.17 times more volatile than TEXAS ROADHOUSE. It trades about 0.31 of its potential returns per unit of risk. TEXAS ROADHOUSE is currently generating about -0.13 per unit of risk. If you would invest 437.00 in Banco Santander SA on December 1, 2024 and sell it today you would earn a total of 184.00 from holding Banco Santander SA or generate 42.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Banco Santander SA vs. TEXAS ROADHOUSE
Performance |
Timeline |
Banco Santander SA |
TEXAS ROADHOUSE |
Banco Santander and TEXAS ROADHOUSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Santander and TEXAS ROADHOUSE
The main advantage of trading using opposite Banco Santander and TEXAS ROADHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, TEXAS ROADHOUSE 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 TEXAS ROADHOUSE will offset losses from the drop in TEXAS ROADHOUSE's long position.Banco Santander vs. Constellation Software | Banco Santander vs. Sinopec Shanghai Petrochemical | Banco Santander vs. Beta Systems Software | Banco Santander vs. Sekisui Chemical Co |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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