Correlation Between Banco Santander and Powszechny Zaklad
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Powszechny Zaklad 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 Powszechny Zaklad 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 Powszechny Zaklad Ubezpieczen, you can compare the effects of market volatilities on Banco Santander and Powszechny Zaklad 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 Powszechny Zaklad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Powszechny Zaklad.
Diversification Opportunities for Banco Santander and Powszechny Zaklad
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Powszechny is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Powszechny Zaklad Ubezpieczen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechny Zaklad 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 Powszechny Zaklad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechny Zaklad has no effect on the direction of Banco Santander i.e., Banco Santander and Powszechny Zaklad go up and down completely randomly.
Pair Corralation between Banco Santander and Powszechny Zaklad
Assuming the 90 days trading horizon Banco Santander SA is expected to under-perform the Powszechny Zaklad. But the stock apears to be less risky and, when comparing its historical volatility, Banco Santander SA is 1.08 times less risky than Powszechny Zaklad. The stock trades about -0.03 of its potential returns per unit of risk. The Powszechny Zaklad Ubezpieczen is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,001 in Powszechny Zaklad Ubezpieczen on August 31, 2024 and sell it today you would earn a total of 283.00 from holding Powszechny Zaklad Ubezpieczen or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. Powszechny Zaklad Ubezpieczen
Performance |
| Timeline |
| Banco Santander SA |
| Powszechny Zaklad |
Banco Santander and Powszechny Zaklad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Powszechny Zaklad
The main advantage of trading using opposite Banco Santander and Powszechny Zaklad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Powszechny Zaklad 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 Powszechny Zaklad will offset losses from the drop in Powszechny Zaklad's long position.| Banco Santander vs. Asseco Business Solutions | Banco Santander vs. Detalion Games SA | Banco Santander vs. Asseco South Eastern | Banco Santander vs. CFI Holding SA |
| Powszechny Zaklad vs. TEN SQUARE GAMES | Powszechny Zaklad vs. Movie Games SA | Powszechny Zaklad vs. CI Games SA | Powszechny Zaklad vs. Detalion Games 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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