Correlation Between Santander Bank and Comp SA
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Comp 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 Comp 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 Comp SA, you can compare the effects of market volatilities on Santander Bank and Comp 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 Comp SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Comp SA.
Diversification Opportunities for Santander Bank and Comp SA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Santander and Comp is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Comp SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comp 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 Comp SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comp SA has no effect on the direction of Santander Bank i.e., Santander Bank and Comp SA go up and down completely randomly.
Pair Corralation between Santander Bank and Comp SA
Assuming the 90 days trading horizon Santander Bank Polska is expected to under-perform the Comp SA. In addition to that, Santander Bank is 1.1 times more volatile than Comp SA. It trades about -0.05 of its total potential returns per unit of risk. Comp SA is currently generating about 0.07 per unit of volatility. If you would invest 10,350 in Comp SA on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Comp SA or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Santander Bank Polska vs. Comp SA
Performance |
| Timeline |
| Santander Bank Polska |
| Comp SA |
Santander Bank and Comp SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Comp SA
The main advantage of trading using opposite Santander Bank and Comp SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Comp 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 Comp SA will offset losses from the drop in Comp SA's long position.| Santander Bank vs. ING Bank lski | Santander Bank vs. PMPG Polskie Media | Santander Bank vs. Noble Financials SA | Santander Bank vs. New Tech Venture |
| Comp SA vs. Asseco Business Solutions | Comp SA vs. Detalion Games SA | Comp SA vs. Asseco South Eastern | Comp SA vs. CFI Holding 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |