Correlation Between Erste Group and Banco Santander
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By analyzing existing cross correlation between Erste Group Bank and Banco Santander SA, you can compare the effects of market volatilities on Erste Group and Banco 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 Erste Group with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Banco Santander.
Diversification Opportunities for Erste Group and Banco Santander
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Erste and Banco is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and Erste Group 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 Erste Group Bank are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of Erste Group i.e., Erste Group and Banco Santander go up and down completely randomly.
Pair Corralation between Erste Group and Banco Santander
Assuming the 90 days trading horizon Erste Group is expected to generate 1.84 times less return on investment than Banco Santander. But when comparing it to its historical volatility, Erste Group Bank is 1.12 times less risky than Banco Santander. It trades about 0.22 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 439.00 in Banco Santander SA on October 25, 2024 and sell it today you would earn a total of 35.00 from holding Banco Santander SA or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. Banco Santander SA
Performance |
| Timeline |
| Erste Group Bank |
| Banco Santander SA |
Erste Group and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Banco Santander
The main advantage of trading using opposite Erste Group and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group position performs unexpectedly, Banco 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Erste Group vs. Apple Inc | Erste Group vs. Apple Inc | Erste Group vs. Apple Inc | Erste Group vs. Apple Inc |
| Banco Santander vs. MOBILE FACTORY INC | Banco Santander vs. United Breweries Co | Banco Santander vs. Ribbon Communications | Banco Santander vs. Monster Beverage Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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