Correlation Between Santander Bank and Cloud Technologies
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Cloud Technologies 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 Cloud Technologies 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 Cloud Technologies SA, you can compare the effects of market volatilities on Santander Bank and Cloud Technologies 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 Cloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Cloud Technologies.
Diversification Opportunities for Santander Bank and Cloud Technologies
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santander and Cloud is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Cloud Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Technologies 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 Cloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Technologies has no effect on the direction of Santander Bank i.e., Santander Bank and Cloud Technologies go up and down completely randomly.
Pair Corralation between Santander Bank and Cloud Technologies
Assuming the 90 days trading horizon Santander Bank is expected to generate 2.35 times less return on investment than Cloud Technologies. But when comparing it to its historical volatility, Santander Bank Polska is 1.6 times less risky than Cloud Technologies. It trades about 0.01 of its potential returns per unit of risk. Cloud Technologies SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,294 in Cloud Technologies SA on August 24, 2024 and sell it today you would earn a total of 186.00 from holding Cloud Technologies SA or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Cloud Technologies SA
Performance |
| Timeline |
| Santander Bank Polska |
| Cloud Technologies |
Santander Bank and Cloud Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Cloud Technologies
The main advantage of trading using opposite Santander Bank and Cloud Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Cloud Technologies 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 Cloud Technologies will offset losses from the drop in Cloud Technologies' long position.| Santander Bank vs. Cloud Technologies SA | Santander Bank vs. Pixel Crow Games | Santander Bank vs. SOFTWARE MANSION SPOLKA | Santander Bank vs. Drago entertainment SA |
| Cloud Technologies vs. Asseco Business Solutions | Cloud Technologies vs. Detalion Games SA | Cloud Technologies vs. Asseco South Eastern | Cloud Technologies vs. Movie 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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