Correlation Between Banco Santander and Fabryki Mebli
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Fabryki Mebli 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 Fabryki Mebli 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 Fabryki Mebli Forte, you can compare the effects of market volatilities on Banco Santander and Fabryki Mebli 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 Fabryki Mebli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Fabryki Mebli.
Diversification Opportunities for Banco Santander and Fabryki Mebli
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banco and Fabryki is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Fabryki Mebli Forte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabryki Mebli Forte 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 Fabryki Mebli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabryki Mebli Forte has no effect on the direction of Banco Santander i.e., Banco Santander and Fabryki Mebli go up and down completely randomly.
Pair Corralation between Banco Santander and Fabryki Mebli
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 0.95 times more return on investment than Fabryki Mebli. However, Banco Santander SA is 1.06 times less risky than Fabryki Mebli. It trades about 0.06 of its potential returns per unit of risk. Fabryki Mebli Forte is currently generating about 0.02 per unit of risk. If you would invest 1,219 in Banco Santander SA on September 3, 2024 and sell it today you would earn a total of 659.00 from holding Banco Santander SA or generate 54.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Banco Santander SA vs. Fabryki Mebli Forte
Performance |
| Timeline |
| Banco Santander SA |
| Fabryki Mebli Forte |
Banco Santander and Fabryki Mebli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Fabryki Mebli
The main advantage of trading using opposite Banco Santander and Fabryki Mebli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Fabryki Mebli 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 Fabryki Mebli will offset losses from the drop in Fabryki Mebli's long position.| Banco Santander vs. Quantum Software SA | Banco Santander vs. Biztech Konsulting SA | Banco Santander vs. Ultimate Games SA | Banco Santander vs. New Tech Venture |
| Fabryki Mebli vs. Banco Santander SA | Fabryki Mebli vs. UniCredit SpA | Fabryki Mebli vs. CEZ as | Fabryki Mebli vs. Polski Koncern Naftowy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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