Correlation Between Intersport Polska and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Intersport Polska 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 Intersport Polska and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intersport Polska SA and Santander Bank Polska, you can compare the effects of market volatilities on Intersport Polska 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 Intersport Polska with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intersport Polska and Santander Bank.
Diversification Opportunities for Intersport Polska and Santander Bank
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intersport and Santander is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA 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 Intersport Polska 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 Intersport Polska SA 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 Intersport Polska i.e., Intersport Polska and Santander Bank go up and down completely randomly.
Pair Corralation between Intersport Polska and Santander Bank
Assuming the 90 days trading horizon Intersport Polska SA is expected to under-perform the Santander Bank. In addition to that, Intersport Polska is 2.13 times more volatile than Santander Bank Polska. It trades about -0.04 of its total potential returns per unit of risk. Santander Bank Polska is currently generating about 0.0 per unit of volatility. If you would invest 45,023 in Santander Bank Polska on August 25, 2024 and sell it today you would lose (723.00) from holding Santander Bank Polska or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intersport Polska SA vs. Santander Bank Polska
Performance |
| Timeline |
| Intersport Polska |
| Santander Bank Polska |
Intersport Polska and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intersport Polska and Santander Bank
The main advantage of trading using opposite Intersport Polska and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intersport Polska 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.| Intersport Polska vs. Asseco Business Solutions | Intersport Polska vs. Detalion Games SA | Intersport Polska vs. Asseco South Eastern | Intersport Polska vs. Movie Games SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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