Correlation Between Mlk Foods and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Mlk Foods 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 Mlk Foods and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mlk Foods Public and Santander Bank Polska, you can compare the effects of market volatilities on Mlk Foods 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 Mlk Foods with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mlk Foods and Santander Bank.
Diversification Opportunities for Mlk Foods and Santander Bank
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mlk and Santander is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public 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 Mlk Foods 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 Mlk Foods Public 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 Mlk Foods i.e., Mlk Foods and Santander Bank go up and down completely randomly.
Pair Corralation between Mlk Foods and Santander Bank
Assuming the 90 days trading horizon Mlk Foods is expected to generate 1.13 times less return on investment than Santander Bank. In addition to that, Mlk Foods is 1.98 times more volatile than Santander Bank Polska. It trades about 0.03 of its total potential returns per unit of risk. Santander Bank Polska is currently generating about 0.08 per unit of volatility. If you would invest 22,847 in Santander Bank Polska on September 2, 2024 and sell it today you would earn a total of 20,873 from holding Santander Bank Polska or generate 91.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mlk Foods Public vs. Santander Bank Polska
Performance |
| Timeline |
| Mlk Foods Public |
| Santander Bank Polska |
Mlk Foods and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mlk Foods and Santander Bank
The main advantage of trading using opposite Mlk Foods and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mlk Foods 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.| Mlk Foods vs. MCI Management SA | Mlk Foods vs. Quantum Software SA | Mlk Foods vs. Inter Cars SA | Mlk Foods vs. Igoria Trade SA |
| Santander Bank vs. PZ Cormay SA | Santander Bank vs. MW Trade SA | Santander Bank vs. LSI Software SA | Santander Bank vs. Logintrade 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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