Correlation Between Santander Bank and MBank SA
Can any of the company-specific risk be diversified away by investing in both Santander Bank and MBank 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 MBank 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 mBank SA, you can compare the effects of market volatilities on Santander Bank and MBank 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 MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and MBank SA.
Diversification Opportunities for Santander Bank and MBank SA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santander and MBank is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank 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 MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of Santander Bank i.e., Santander Bank and MBank SA go up and down completely randomly.
Pair Corralation between Santander Bank and MBank SA
Assuming the 90 days trading horizon Santander Bank Polska is expected to under-perform the MBank SA. But the stock apears to be less risky and, when comparing its historical volatility, Santander Bank Polska is 1.03 times less risky than MBank SA. The stock trades about -0.09 of its potential returns per unit of risk. The mBank SA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 62,760 in mBank SA on August 28, 2024 and sell it today you would lose (7,820) from holding mBank SA or give up 12.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. mBank SA
Performance |
| Timeline |
| Santander Bank Polska |
| mBank SA |
Santander Bank and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and MBank SA
The main advantage of trading using opposite Santander Bank and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, MBank 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 MBank SA will offset losses from the drop in MBank SA'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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |