Correlation Between Bank Millennium and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Bank Millennium 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 Bank Millennium and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Millennium SA and Santander Bank Polska, you can compare the effects of market volatilities on Bank Millennium 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 Bank Millennium with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Millennium and Santander Bank.
Diversification Opportunities for Bank Millennium and Santander Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Santander is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank Millennium 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 Bank Millennium 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 Bank Millennium 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 Bank Millennium i.e., Bank Millennium and Santander Bank go up and down completely randomly.
Pair Corralation between Bank Millennium and Santander Bank
If you would invest 845.00 in Bank Millennium SA on September 1, 2024 and sell it today you would lose (1.00) from holding Bank Millennium SA or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Millennium SA vs. Santander Bank Polska
Performance |
| Timeline |
| Bank Millennium SA |
| Santander Bank Polska |
Bank Millennium and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Millennium and Santander Bank
The main advantage of trading using opposite Bank Millennium and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Millennium 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.| Bank Millennium vs. Santander Bank Polska | Bank Millennium vs. Bank Handlowy w | Bank Millennium vs. Bank Ochrony rodowiska |
| Santander Bank vs. ING Bank lski | Santander Bank vs. PMPG Polskie Media | Santander Bank vs. Noble Financials SA | Santander Bank vs. New Tech Venture |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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