Correlation Between SANTANDER and Team Internet

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

Diversification Opportunities for SANTANDER and Team Internet

-0.02

Correlation Coefficient

SANTANDER  Team Internet

Good diversification

The 3 months correlation between SANTANDER and Team is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and Team Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Internet Group 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 Team Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Internet Group has no effect on the direction of SANTANDER i.e., SANTANDER and Team Internet go up and down completely randomly.

Pair Corralation between SANTANDER and Team Internet

Assuming the 90 days trading horizon SANTANDER UK 10 is expected to under-perform the Team Internet. But the stock apears to be less risky and, when comparing its historical volatility, SANTANDER UK 10 is 16.77 times less risky than Team Internet. The stock trades about -0.21 of its potential returns per unit of risk. The Team Internet Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,830  in Team Internet Group on October 6, 2024 and sell it today you would earn a total of  190.00  from holding Team Internet Group or generate 2.15% return on investment over 90 days.

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

SANTANDER UK 10  vs.  Team Internet Group

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.

Team Internet Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Team Internet Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SANTANDER and Team Internet

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

The idea behind SANTANDER UK 10 and Team Internet Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.