Correlation Between Santander Bank and Inpro SA
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Inpro 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 Inpro 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 Inpro SA, you can compare the effects of market volatilities on Santander Bank and Inpro 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 Inpro SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Inpro SA.
Diversification Opportunities for Santander Bank and Inpro SA
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Santander and Inpro is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Inpro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpro 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 Inpro SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpro SA has no effect on the direction of Santander Bank i.e., Santander Bank and Inpro SA go up and down completely randomly.
Pair Corralation between Santander Bank and Inpro SA
Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 0.91 times more return on investment than Inpro SA. However, Santander Bank Polska is 1.09 times less risky than Inpro SA. It trades about 0.01 of its potential returns per unit of risk. Inpro SA is currently generating about -0.06 per unit of risk. If you would invest 47,180 in Santander Bank Polska on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Santander Bank Polska or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Inpro SA
Performance |
| Timeline |
| Santander Bank Polska |
| Inpro SA |
Santander Bank and Inpro SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Inpro SA
The main advantage of trading using opposite Santander Bank and Inpro SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Inpro 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 Inpro SA will offset losses from the drop in Inpro SA's long position.| Santander Bank vs. Drago entertainment SA | Santander Bank vs. Quantum Software SA | Santander Bank vs. Noble Financials SA | Santander Bank vs. BNP Paribas Bank |
| Inpro SA vs. Varsav Game Studios | Inpro SA vs. Medicalg | Inpro SA vs. Logintrade SA | Inpro SA vs. Play2Chill 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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