Correlation Between Santander Bank and ING Bank
Can any of the company-specific risk be diversified away by investing in both Santander Bank and ING Bank 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 ING Bank 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 ING Bank lski, you can compare the effects of market volatilities on Santander Bank and ING Bank 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 ING Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and ING Bank.
Diversification Opportunities for Santander Bank and ING Bank
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Santander and ING is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and ING Bank lski in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Bank lski 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 ING Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Bank lski has no effect on the direction of Santander Bank i.e., Santander Bank and ING Bank go up and down completely randomly.
Pair Corralation between Santander Bank and ING Bank
Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 1.58 times more return on investment than ING Bank. However, Santander Bank is 1.58 times more volatile than ING Bank lski. It trades about -0.01 of its potential returns per unit of risk. ING Bank lski is currently generating about -0.1 per unit of risk. If you would invest 44,880 in Santander Bank Polska on August 27, 2024 and sell it today you would lose (580.00) from holding Santander Bank Polska or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. ING Bank lski
Performance |
| Timeline |
| Santander Bank Polska |
| ING Bank lski |
Santander Bank and ING Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and ING Bank
The main advantage of trading using opposite Santander Bank and ING Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, ING Bank 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 ING Bank will offset losses from the drop in ING Bank's long position.| Santander Bank vs. GreenX Metals | Santander Bank vs. LSI Software SA | Santander Bank vs. UniCredit SpA | Santander Bank vs. Noble Financials 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |