Correlation Between SANTANDER and Amundi MSCI

Can any of the company-specific risk be diversified away by investing in both SANTANDER and Amundi MSCI 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 Amundi MSCI 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 Amundi MSCI UK, you can compare the effects of market volatilities on SANTANDER and Amundi MSCI 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 Amundi MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Amundi MSCI.

Diversification Opportunities for SANTANDER and Amundi MSCI

-0.46

Correlation Coefficient

SANTANDER  Amundi MSCI

Very good diversification

The 3 months correlation between SANTANDER and Amundi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and Amundi MSCI UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI UK 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 Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI UK has no effect on the direction of SANTANDER i.e., SANTANDER and Amundi MSCI go up and down completely randomly.

Pair Corralation between SANTANDER and Amundi MSCI

Assuming the 90 days trading horizon SANTANDER UK 10 is expected to generate 0.41 times more return on investment than Amundi MSCI. However, SANTANDER UK 10 is 2.46 times less risky than Amundi MSCI. It trades about 0.0 of its potential returns per unit of risk. Amundi MSCI UK is currently generating about -0.04 per unit of risk. If you would invest  15,600  in SANTANDER UK 10 on September 21, 2024 and sell it today you would lose (10.00) from holding SANTANDER UK 10 or give up 0.06% of portfolio value over 90 days.

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

SANTANDER UK 10  vs.  Amundi MSCI UK

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amundi MSCI UK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi MSCI UK has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Amundi MSCI is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SANTANDER and Amundi MSCI

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

The idea behind SANTANDER UK 10 and Amundi MSCI UK 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.