Correlation Between Santander Bank and Ailleron
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Ailleron 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 Ailleron 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 Ailleron SA, you can compare the effects of market volatilities on Santander Bank and Ailleron 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 Ailleron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Ailleron.
Diversification Opportunities for Santander Bank and Ailleron
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santander and Ailleron is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Ailleron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ailleron 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 Ailleron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ailleron SA has no effect on the direction of Santander Bank i.e., Santander Bank and Ailleron go up and down completely randomly.
Pair Corralation between Santander Bank and Ailleron
Assuming the 90 days trading horizon Santander Bank Polska is expected to under-perform the Ailleron. In addition to that, Santander Bank is 1.16 times more volatile than Ailleron SA. It trades about -0.16 of its total potential returns per unit of risk. Ailleron SA is currently generating about 0.06 per unit of volatility. If you would invest 2,100 in Ailleron SA on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Ailleron SA or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Ailleron SA
Performance |
| Timeline |
| Santander Bank Polska |
| Ailleron SA |
Santander Bank and Ailleron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Ailleron
The main advantage of trading using opposite Santander Bank and Ailleron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Ailleron 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 Ailleron will offset losses from the drop in Ailleron'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 |
| Ailleron vs. Cloud Technologies SA | Ailleron vs. Asseco Business Solutions | Ailleron vs. Kogeneracja SA | Ailleron 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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