Correlation Between Banco Santander and Tauron Polska
Can any of the company-specific risk be diversified away by investing in both Banco Santander and Tauron Polska 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 Tauron Polska 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 Tauron Polska Energia, you can compare the effects of market volatilities on Banco Santander and Tauron Polska 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 Tauron Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Tauron Polska.
Diversification Opportunities for Banco Santander and Tauron Polska
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Tauron is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and Tauron Polska Energia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tauron Polska Energia 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 Tauron Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tauron Polska Energia has no effect on the direction of Banco Santander i.e., Banco Santander and Tauron Polska go up and down completely randomly.
Pair Corralation between Banco Santander and Tauron Polska
Assuming the 90 days trading horizon Banco Santander SA is expected to generate 1.0 times more return on investment than Tauron Polska. However, Banco Santander is 1.0 times more volatile than Tauron Polska Energia. It trades about 0.53 of its potential returns per unit of risk. Tauron Polska Energia is currently generating about 0.36 per unit of risk. If you would invest 1,833 in Banco Santander SA on October 24, 2024 and sell it today you would earn a total of 218.00 from holding Banco Santander SA or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander SA vs. Tauron Polska Energia
Performance |
| Timeline |
| Banco Santander SA |
| Tauron Polska Energia |
Banco Santander and Tauron Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Tauron Polska
The main advantage of trading using opposite Banco Santander and Tauron Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, Tauron Polska 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 Tauron Polska will offset losses from the drop in Tauron Polska's long position.| Banco Santander vs. Cloud Technologies SA | Banco Santander vs. CI Games SA | Banco Santander vs. Saule Technologies SA | Banco Santander vs. Movie Games SA |
| Tauron Polska vs. Skyline Investment SA | Tauron Polska vs. MW Trade SA | Tauron Polska vs. MCI Management SA | Tauron Polska vs. All In Games |
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 Stocks Directory module to find actively traded stocks across global markets.
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