Correlation Between Santander Bank and 4Mass SA
Can any of the company-specific risk be diversified away by investing in both Santander Bank and 4Mass SA 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 Santander Bank and 4Mass SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santander Bank Polska and 4Mass SA, you can compare the effects of market volatilities on Santander Bank and 4Mass SA 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 Santander Bank with a short position of 4Mass SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and 4Mass SA.
Diversification Opportunities for Santander Bank and 4Mass SA
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Santander and 4Mass is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and 4Mass SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Mass SA and Santander Bank 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 Santander Bank Polska are associated (or correlated) with 4Mass SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Mass SA has no effect on the direction of Santander Bank i.e., Santander Bank and 4Mass SA go up and down completely randomly.
Pair Corralation between Santander Bank and 4Mass SA
Assuming the 90 days trading horizon Santander Bank is expected to generate 1.72 times less return on investment than 4Mass SA. But when comparing it to its historical volatility, Santander Bank Polska is 1.51 times less risky than 4Mass SA. It trades about 0.07 of its potential returns per unit of risk. 4Mass SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 233.00 in 4Mass SA on September 3, 2024 and sell it today you would earn a total of 410.00 from holding 4Mass SA or generate 175.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Santander Bank Polska vs. 4Mass SA
Performance |
| Timeline |
| Santander Bank Polska |
| 4Mass SA |
Santander Bank and 4Mass SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and 4Mass SA
The main advantage of trading using opposite Santander Bank and 4Mass SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, 4Mass SA 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 4Mass SA will offset losses from the drop in 4Mass SA's long position.| Santander Bank vs. SOFTWARE MANSION SPOLKA | Santander Bank vs. LSI Software SA | Santander Bank vs. Quantum Software SA | Santander Bank vs. GreenX Metals |
| 4Mass SA vs. Asseco Business Solutions | 4Mass SA vs. Detalion Games SA | 4Mass SA vs. Kogeneracja SA | 4Mass SA 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 CEOs Directory module to screen CEOs from public companies around the world.
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