Correlation Between SANTANDER and Tamburi Investment

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

By analyzing existing cross correlation between SANTANDER UK 10 and Tamburi Investment Partners, you can compare the effects of market volatilities on SANTANDER and Tamburi Investment 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 SANTANDER with a short position of Tamburi Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Tamburi Investment.

Diversification Opportunities for SANTANDER and Tamburi Investment

0.21

Correlation Coefficient

SANTANDER  Tamburi Investment

Modest diversification

The 3 months correlation between SANTANDER and Tamburi is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and Tamburi Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamburi Investment and 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 SANTANDER UK 10 are associated (or correlated) with Tamburi Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamburi Investment has no effect on the direction of SANTANDER i.e., SANTANDER and Tamburi Investment go up and down completely randomly.

Pair Corralation between SANTANDER and Tamburi Investment

Assuming the 90 days trading horizon SANTANDER UK 10 is expected to under-perform the Tamburi Investment. But the stock apears to be less risky and, when comparing its historical volatility, SANTANDER UK 10 is 2.85 times less risky than Tamburi Investment. The stock trades about -0.06 of its potential returns per unit of risk. The Tamburi Investment Partners is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  856.00  in Tamburi Investment Partners on October 6, 2024 and sell it today you would lose (1.00) from holding Tamburi Investment Partners or give up 0.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

SANTANDER UK 10  vs.  Tamburi Investment Partners

SANTANDER UK 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SANTANDER UK 10 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, SANTANDER is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Tamburi Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tamburi Investment Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tamburi Investment 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 SANTANDER and Tamburi Investment

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

The idea behind SANTANDER UK 10 and Tamburi Investment Partners 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.