Correlation Between Air New and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Air New and Santander Bank 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 Air New and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Santander Bank Polska, you can compare the effects of market volatilities on Air New and Santander Bank 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 Air New with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Santander Bank.
Diversification Opportunities for Air New and Santander Bank
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Santander is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Santander Bank Polska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santander Bank Polska and Air New 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 Air New Zealand are associated (or correlated) with Santander Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santander Bank Polska has no effect on the direction of Air New i.e., Air New and Santander Bank go up and down completely randomly.
Pair Corralation between Air New and Santander Bank
Assuming the 90 days trading horizon Air New Zealand is expected to under-perform the Santander Bank. But the stock apears to be less risky and, when comparing its historical volatility, Air New Zealand is 2.06 times less risky than Santander Bank. The stock trades about -0.01 of its potential returns per unit of risk. The Santander Bank Polska is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,869 in Santander Bank Polska on September 2, 2024 and sell it today you would earn a total of 7,261 from holding Santander Bank Polska or generate 253.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Santander Bank Polska
Performance |
| Timeline |
| Air New Zealand |
| Santander Bank Polska |
Air New and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Santander Bank
The main advantage of trading using opposite Air New and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Santander Bank 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 Bank will offset losses from the drop in Santander Bank's long position.| Air New vs. SIVERS SEMICONDUCTORS AB | Air New vs. Darden Restaurants | Air New vs. Reliance Steel Aluminum | Air New vs. Q2M Managementberatung AG |
| Santander Bank vs. Ryanair Holdings plc | Santander Bank vs. DELTA AIR LINES | Santander Bank vs. Altair Engineering | Santander Bank vs. Air New Zealand |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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