Correlation Between Santander Bank and Herkules
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Herkules 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 Herkules 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 Herkules SA, you can compare the effects of market volatilities on Santander Bank and Herkules 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 Herkules. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Herkules.
Diversification Opportunities for Santander Bank and Herkules
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Santander and Herkules is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Herkules SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herkules 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 Herkules. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herkules SA has no effect on the direction of Santander Bank i.e., Santander Bank and Herkules go up and down completely randomly.
Pair Corralation between Santander Bank and Herkules
Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 0.5 times more return on investment than Herkules. However, Santander Bank Polska is 1.99 times less risky than Herkules. It trades about 0.01 of its potential returns per unit of risk. Herkules SA is currently generating about -0.01 per unit of risk. If you would invest 51,960 in Santander Bank Polska on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Santander Bank Polska or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Herkules SA
Performance |
| Timeline |
| Santander Bank Polska |
| Herkules SA |
Santander Bank and Herkules Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Herkules
The main advantage of trading using opposite Santander Bank and Herkules positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Herkules 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 Herkules will offset losses from the drop in Herkules' long position.| Santander Bank vs. Gamedust SA | Santander Bank vs. UF Games SA | Santander Bank vs. Saule Technologies SA | Santander Bank vs. Quantum Software SA |
| Herkules vs. Alior Bank SA | Herkules vs. Movie Games SA | Herkules vs. Marie Brizard Wine | Herkules vs. Creotech Instruments 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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