Correlation Between Santander Bank and Enea SA
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Enea 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 Enea 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 Enea SA, you can compare the effects of market volatilities on Santander Bank and Enea 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 Enea SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Enea SA.
Diversification Opportunities for Santander Bank and Enea SA
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santander and Enea is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Enea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea 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 Enea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea SA has no effect on the direction of Santander Bank i.e., Santander Bank and Enea SA go up and down completely randomly.
Pair Corralation between Santander Bank and Enea SA
Assuming the 90 days trading horizon Santander Bank Polska is expected to under-perform the Enea SA. But the stock apears to be less risky and, when comparing its historical volatility, Santander Bank Polska is 1.15 times less risky than Enea SA. The stock trades about -0.06 of its potential returns per unit of risk. The Enea SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,114 in Enea SA on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Enea SA or generate 4.04% 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. Enea SA
Performance |
| Timeline |
| Santander Bank Polska |
| Enea SA |
Santander Bank and Enea SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Enea SA
The main advantage of trading using opposite Santander Bank and Enea SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Enea 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 Enea SA will offset losses from the drop in Enea 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 |
| Enea SA vs. Live Motion Games | Enea SA vs. True Games Syndicate | Enea SA vs. mBank SA | Enea SA vs. Santander Bank Polska |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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