Correlation Between Santander Bank and AIB Group
Can any of the company-specific risk be diversified away by investing in both Santander Bank and AIB Group 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 Bank and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santander Bank Polska and AIB Group plc, you can compare the effects of market volatilities on Santander Bank and AIB Group 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 Bank with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and AIB Group.
Diversification Opportunities for Santander Bank and AIB Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santander and AIB is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc and Santander 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 Santander Bank Polska are associated (or correlated) with AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of Santander Bank i.e., Santander Bank and AIB Group go up and down completely randomly.
Pair Corralation between Santander Bank and AIB Group
Assuming the 90 days horizon Santander Bank Polska is expected to under-perform the AIB Group. In addition to that, Santander Bank is 1.11 times more volatile than AIB Group plc. It trades about -0.04 of its total potential returns per unit of risk. AIB Group plc is currently generating about 0.0 per unit of volatility. If you would invest 518.00 in AIB Group plc on September 1, 2024 and sell it today you would lose (17.00) from holding AIB Group plc or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. AIB Group plc
Performance |
| Timeline |
| Santander Bank Polska |
| AIB Group plc |
Santander Bank and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and AIB Group
The main advantage of trading using opposite Santander Bank and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.| Santander Bank vs. Lion One Metals | Santander Bank vs. NURAN WIRELESS INC | Santander Bank vs. CENTURIA OFFICE REIT | Santander Bank vs. Carsales |
| AIB Group vs. NIPPON MEAT PACKERS | AIB Group vs. AUSNUTRIA DAIRY | AIB Group vs. INDOFOOD AGRI RES | AIB Group vs. SENECA FOODS A |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |