Correlation Between Calculus VCT and SANTANDER

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

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

Diversification Opportunities for Calculus VCT and SANTANDER

0.24

Correlation Coefficient

Calculus VCT  SANTANDER

Modest diversification

The 3 months correlation between Calculus and SANTANDER is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Calculus VCT plc 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 Calculus VCT 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 Calculus VCT plc 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 Calculus VCT i.e., Calculus VCT and SANTANDER go up and down completely randomly.

Pair Corralation between Calculus VCT and SANTANDER

Assuming the 90 days trading horizon Calculus VCT plc is expected to under-perform the SANTANDER. In addition to that, Calculus VCT is 6.25 times more volatile than SANTANDER UK 8. It trades about -0.13 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about -0.2 per unit of volatility. If you would invest  13,700  in SANTANDER UK 8 on October 23, 2024 and sell it today you would lose (400.00) from holding SANTANDER UK 8 or give up 2.92% of portfolio value over 90 days.

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

Calculus VCT plc  vs.  SANTANDER UK 8

Calculus VCT plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calculus VCT plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

SANTANDER UK 8

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SANTANDER UK 8 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SANTANDER is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Calculus VCT and SANTANDER

The main advantage of trading using opposite Calculus VCT and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calculus VCT 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 Calculus VCT plc 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 Stocks Directory module to find actively traded stocks across global markets.