Correlation Between Santander Bank and ED Invest

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Santander Bank and ED Invest 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 ED Invest 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 ED Invest SA, you can compare the effects of market volatilities on Santander Bank and ED Invest 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 ED Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and ED Invest.

Diversification Opportunities for Santander Bank and ED Invest

SantanderEDIDiversified AwaySantanderEDIDiversified Away100%
0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Santander and EDI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and ED Invest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Invest 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 ED Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Invest SA has no effect on the direction of Santander Bank i.e., Santander Bank and ED Invest go up and down completely randomly.

Pair Corralation between Santander Bank and ED Invest

Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 1.57 times more return on investment than ED Invest. However, Santander Bank is 1.57 times more volatile than ED Invest SA. It trades about 0.12 of its potential returns per unit of risk. ED Invest SA is currently generating about 0.1 per unit of risk. If you would invest  50,160  in Santander Bank Polska on November 30, 2024 and sell it today you would earn a total of  2,360  from holding Santander Bank Polska or generate 4.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Santander Bank Polska  vs.  ED Invest SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520
JavaScript chart by amCharts 3.21.15SPL EDI
       Timeline  
Santander Bank Polska 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Santander Bank Polska are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Santander Bank reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb440460480500520540560
ED Invest SA 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ED Invest SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, ED Invest is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.45.65.866.26.46.66.8

Santander Bank and ED Invest Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.91-3.68-2.44-1.210.02241.322.674.015.36 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15SPL EDI
       Returns  

Pair Trading with Santander Bank and ED Invest

The main advantage of trading using opposite Santander Bank and ED Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, ED Invest 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 ED Invest will offset losses from the drop in ED Invest's long position.
The idea behind Santander Bank Polska and ED Invest SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments