Correlation Between SANTANDER and Zinc Media

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

Diversification Opportunities for SANTANDER and Zinc Media

-0.29

Correlation Coefficient

SANTANDER  Zinc Media

Very good diversification

The 3 months correlation between SANTANDER and Zinc is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and Zinc Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinc Media 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 Zinc Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinc Media Group has no effect on the direction of SANTANDER i.e., SANTANDER and Zinc Media go up and down completely randomly.

Pair Corralation between SANTANDER and Zinc Media

Assuming the 90 days trading horizon SANTANDER UK 10 is expected to generate 0.11 times more return on investment than Zinc Media. However, SANTANDER UK 10 is 9.37 times less risky than Zinc Media. It trades about 0.02 of its potential returns per unit of risk. Zinc Media Group is currently generating about -0.15 per unit of risk. If you would invest  15,600  in SANTANDER UK 10 on September 14, 2024 and sell it today you would earn a total of  65.00  from holding SANTANDER UK 10 or generate 0.42% 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.  Zinc Media Group

SANTANDER UK 10

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SANTANDER UK 10 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, SANTANDER is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Zinc Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SANTANDER and Zinc Media

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

The idea behind SANTANDER UK 10 and Zinc Media 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.