Correlation Between Bank Polska and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Bank 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 Bank 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 Bank Polska Kasa and Santander Bank Polska, you can compare the effects of market volatilities on Bank 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 Bank Polska with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Polska and Santander Bank.
Diversification Opportunities for Bank Polska and Santander Bank
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Santander is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank Polska Kasa 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 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 Bank Polska Kasa 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 Polska i.e., Bank Polska and Santander Bank go up and down completely randomly.
Pair Corralation between Bank Polska and Santander Bank
Assuming the 90 days trading horizon Bank Polska Kasa is expected to under-perform the Santander Bank. In addition to that, Bank Polska is 1.0 times more volatile than Santander Bank Polska. It trades about -0.02 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 44,880 in Santander Bank Polska on August 28, 2024 and sell it today you would lose (320.00) from holding Santander Bank Polska or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Polska Kasa vs. Santander Bank Polska
Performance |
| Timeline |
| Bank Polska Kasa |
| Santander Bank Polska |
Bank Polska and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Polska and Santander Bank
The main advantage of trading using opposite Bank Polska and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank 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.| Bank Polska vs. Ultimate Games SA | Bank Polska vs. Baked Games SA | Bank Polska vs. Pixel Crow Games | Bank Polska vs. Gaming Factory SA |
| Santander Bank vs. GreenX Metals | Santander Bank vs. LSI Software SA | Santander Bank vs. UniCredit SpA | Santander Bank vs. Noble Financials 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |