Correlation Between GreenX Metals and SANTANDER

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

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

Diversification Opportunities for GreenX Metals and SANTANDER

0.18

Correlation Coefficient

GreenX Metals  SANTANDER

Average diversification

The 3 months correlation between GreenX and SANTANDER is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals 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 GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and SANTANDER go up and down completely randomly.

Pair Corralation between GreenX Metals and SANTANDER

Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the SANTANDER. In addition to that, GreenX Metals is 7.34 times more volatile than SANTANDER UK 8. It trades about -0.08 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.09 per unit of volatility. If you would invest  13,550  in SANTANDER UK 8 on October 7, 2024 and sell it today you would earn a total of  50.00  from holding SANTANDER UK 8 or generate 0.37% return on investment over 90 days.

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

GreenX Metals  vs.  SANTANDER UK 8

GreenX Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, GreenX Metals is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

SANTANDER UK 8

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SANTANDER UK 8 are ranked lower than 2 (%) 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 GreenX Metals and SANTANDER

The main advantage of trading using opposite GreenX Metals and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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 GreenX Metals 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.