Correlation Between Santander Bank and Inter Cars
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Inter Cars 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 Inter Cars 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 Inter Cars SA, you can compare the effects of market volatilities on Santander Bank and Inter Cars 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 Inter Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Inter Cars.
Diversification Opportunities for Santander Bank and Inter Cars
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santander and Inter is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Inter Cars SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Cars 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 Inter Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Cars SA has no effect on the direction of Santander Bank i.e., Santander Bank and Inter Cars go up and down completely randomly.
Pair Corralation between Santander Bank and Inter Cars
Assuming the 90 days trading horizon Santander Bank is expected to generate 1.69 times less return on investment than Inter Cars. In addition to that, Santander Bank is 1.04 times more volatile than Inter Cars SA. It trades about 0.07 of its total potential returns per unit of risk. Inter Cars SA is currently generating about 0.12 per unit of volatility. If you would invest 51,200 in Inter Cars SA on October 22, 2024 and sell it today you would earn a total of 6,400 from holding Inter Cars SA or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Inter Cars SA
Performance |
| Timeline |
| Santander Bank Polska |
| Inter Cars SA |
Santander Bank and Inter Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Inter Cars
The main advantage of trading using opposite Santander Bank and Inter Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Inter Cars 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 Inter Cars will offset losses from the drop in Inter Cars' long position.| Santander Bank vs. Immobile | Santander Bank vs. Skyline Investment SA | Santander Bank vs. Echo Investment SA | Santander Bank vs. Carlson Investments SA |
| Inter Cars vs. Santander Bank Polska | Inter Cars vs. Immobile | Inter Cars vs. MW Trade SA | Inter Cars vs. LSI Software 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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