Correlation Between Edinburgh Investment and SANTANDER

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

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

Diversification Opportunities for Edinburgh Investment and SANTANDER

-0.16

Correlation Coefficient

Edinburgh Investment  SANTANDER

Good diversification

The 3 months correlation between Edinburgh and SANTANDER is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Edinburgh Investment Trust 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 Edinburgh Investment 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 Edinburgh Investment Trust 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 Edinburgh Investment i.e., Edinburgh Investment and SANTANDER go up and down completely randomly.

Pair Corralation between Edinburgh Investment and SANTANDER

Assuming the 90 days trading horizon Edinburgh Investment is expected to generate 2.71 times less return on investment than SANTANDER. In addition to that, Edinburgh Investment is 1.77 times more volatile than SANTANDER UK 8. It trades about 0.03 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.16 per unit of volatility. If you would invest  13,170  in SANTANDER UK 8 on December 26, 2024 and sell it today you would earn a total of  530.00  from holding SANTANDER UK 8 or generate 4.02% return on investment over 90 days.

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

Edinburgh Investment Trust  vs.  SANTANDER UK 8

Edinburgh Investment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Edinburgh Investment Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Edinburgh Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the 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 12 (%) 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Edinburgh Investment and SANTANDER

The main advantage of trading using opposite Edinburgh Investment and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edinburgh Investment 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 Edinburgh Investment Trust 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .