Correlation Between Invesco Health and SANTANDER

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

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

Diversification Opportunities for Invesco Health and SANTANDER

-0.08

Correlation Coefficient

Invesco Health  SANTANDER

Good diversification

The 3 months correlation between Invesco and SANTANDER is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Health Care 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 Invesco Health 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 Invesco Health Care 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 Invesco Health i.e., Invesco Health and SANTANDER go up and down completely randomly.

Pair Corralation between Invesco Health and SANTANDER

Assuming the 90 days trading horizon Invesco Health Care is expected to under-perform the SANTANDER. In addition to that, Invesco Health is 3.77 times more volatile than SANTANDER UK 8. It trades about -0.18 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.03 per unit of volatility. If you would invest  13,550  in SANTANDER UK 8 on October 5, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco Health Care  vs.  SANTANDER UK 8

Invesco Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco Health and SANTANDER

The main advantage of trading using opposite Invesco Health and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Health 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 Invesco Health Care 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.