Correlation Between Santander Bank and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Commerzbank 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 Commerzbank 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 Commerzbank AG, you can compare the effects of market volatilities on Santander Bank and Commerzbank 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 Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Commerzbank.
Diversification Opportunities for Santander Bank and Commerzbank
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Santander and Commerzbank is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG 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 Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of Santander Bank i.e., Santander Bank and Commerzbank go up and down completely randomly.
Pair Corralation between Santander Bank and Commerzbank
Assuming the 90 days horizon Santander Bank Polska is expected to under-perform the Commerzbank. But the stock apears to be less risky and, when comparing its historical volatility, Santander Bank Polska is 1.11 times less risky than Commerzbank. The stock trades about -0.04 of its potential returns per unit of risk. The Commerzbank AG is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,520 in Commerzbank AG on August 29, 2024 and sell it today you would lose (120.00) from holding Commerzbank AG or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Commerzbank AG
Performance |
| Timeline |
| Santander Bank Polska |
| Commerzbank AG |
Santander Bank and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Commerzbank
The main advantage of trading using opposite Santander Bank and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Santander Bank vs. COSMOSTEEL HLDGS | Santander Bank vs. Khiron Life Sciences | Santander Bank vs. Nippon Steel | Santander Bank vs. Entravision Communications |
| Commerzbank vs. Dairy Farm International | Commerzbank vs. HF FOODS GRP | Commerzbank vs. IMAGIN MEDICAL INC | Commerzbank vs. Apollo Medical Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |