Correlation Between Alior Bank and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Alior Bank 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 Alior Bank and SANTANDER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and SANTANDER UK 10, you can compare the effects of market volatilities on Alior Bank 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 Alior Bank with a short position of SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and SANTANDER.
Diversification Opportunities for Alior Bank and SANTANDER
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alior and SANTANDER is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA 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 Alior Bank 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 Alior Bank SA 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 Alior Bank i.e., Alior Bank and SANTANDER go up and down completely randomly.
Pair Corralation between Alior Bank and SANTANDER
Assuming the 90 days trading horizon Alior Bank is expected to generate 8.56 times less return on investment than SANTANDER. In addition to that, Alior Bank is 1.72 times more volatile than SANTANDER UK 10. It trades about 0.01 of its total potential returns per unit of risk. SANTANDER UK 10 is currently generating about 0.11 per unit of volatility. If you would invest 11,479 in SANTANDER UK 10 on September 12, 2024 and sell it today you would earn a total of 4,156 from holding SANTANDER UK 10 or generate 36.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Alior Bank SA vs. SANTANDER UK 10
Performance |
| Timeline |
| Alior Bank SA |
| SANTANDER UK 10 |
Alior Bank and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and SANTANDER
The main advantage of trading using opposite Alior Bank and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank 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.| Alior Bank vs. Toyota Motor Corp | Alior Bank vs. SoftBank Group Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Hershey Co |
| SANTANDER vs. Alior Bank SA | SANTANDER vs. Zegona Communications Plc | SANTANDER vs. Sparebank 1 SR | SANTANDER vs. Cembra Money Bank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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