Correlation Between Fortune Brands and SANTANDER

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

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

Diversification Opportunities for Fortune Brands and SANTANDER

-0.74

Correlation Coefficient

Fortune Brands  SANTANDER

Pay attention - limited upside

The 3 months correlation between Fortune and SANTANDER is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Brands Home and SANTANDER UK 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 10 and Fortune Brands 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 Fortune Brands Home 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 10 has no effect on the direction of Fortune Brands i.e., Fortune Brands and SANTANDER go up and down completely randomly.

Pair Corralation between Fortune Brands and SANTANDER

Assuming the 90 days trading horizon Fortune Brands Home is expected to generate 9.18 times more return on investment than SANTANDER. However, Fortune Brands is 9.18 times more volatile than SANTANDER UK 10. It trades about 0.05 of its potential returns per unit of risk. SANTANDER UK 10 is currently generating about 0.43 per unit of risk. If you would invest  5,075  in Fortune Brands Home on April 11, 2025 and sell it today you would earn a total of  239.00  from holding Fortune Brands Home or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	75.0%
Values	Daily Returns

Fortune Brands Home  vs.  SANTANDER UK 10

Fortune Brands Home

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Brands Home are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fortune Brands may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SANTANDER UK 10

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SANTANDER UK 10 are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SANTANDER may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Fortune Brands and SANTANDER

The main advantage of trading using opposite Fortune Brands and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Brands 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 Fortune Brands Home and SANTANDER UK 10 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.