Correlation Between Banco Santander and Asseco Business
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Asseco Business 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 Banco Santander and Asseco Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander SA and Asseco Business Solutions, you can compare the effects of market volatilities on Banco Santander and Asseco Business 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 Banco Santander with a short position of Asseco Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Asseco Business.
Diversification Opportunities for Banco Santander and Asseco Business
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Asseco is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Asseco Business Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco Business Solutions and Banco Santander 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 Banco Santander SA are associated (or correlated) with Asseco Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco Business Solutions has no effect on the direction of Banco Santander i.e., Banco Santander and Asseco Business go up and down completely randomly.
Pair Corralation between Banco Santander and Asseco Business
Assuming the 90 days trading horizon Banco Santander is expected to generate 1.31 times less return on investment than Asseco Business. In addition to that, Banco Santander is 1.08 times more volatile than Asseco Business Solutions. It trades about 0.06 of its total potential returns per unit of risk. Asseco Business Solutions is currently generating about 0.08 per unit of volatility. If you would invest 2,913 in Asseco Business Solutions on August 24, 2024 and sell it today you would earn a total of 2,587 from holding Asseco Business Solutions or generate 88.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Banco Santander SA vs. Asseco Business Solutions
Performance |
| Timeline |
| Banco Santander SA |
| Asseco Business Solutions |
Banco Santander and Asseco Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Asseco Business
The main advantage of trading using opposite Banco Santander and Asseco Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Asseco Business 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 Asseco Business will offset losses from the drop in Asseco Business' long position.| Banco Santander vs. Cloud Technologies SA | Banco Santander vs. Immobile | Banco Santander vs. Detalion Games SA | Banco Santander vs. Live Motion Games |
| Asseco Business vs. LSI Software SA | Asseco Business vs. Quantum Software SA | Asseco Business vs. Detalion Games SA | Asseco Business vs. Asseco South Eastern |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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