Correlation Between Santander Bank and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Banco Santander 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 Banco Santander 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 Banco Santander SA, you can compare the effects of market volatilities on Santander Bank and Banco Santander 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 Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Banco Santander.
Diversification Opportunities for Santander Bank and Banco Santander
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santander and Banco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander 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 Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of Santander Bank i.e., Santander Bank and Banco Santander go up and down completely randomly.
Pair Corralation between Santander Bank and Banco Santander
Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 1.0 times more return on investment than Banco Santander. However, Santander Bank Polska is 1.0 times less risky than Banco Santander. It trades about 0.24 of its potential returns per unit of risk. Banco Santander SA is currently generating about 0.18 per unit of risk. If you would invest 44,450 in Santander Bank Polska on November 3, 2024 and sell it today you would earn a total of 6,250 from holding Santander Bank Polska or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Banco Santander SA
Performance |
| Timeline |
| Santander Bank Polska |
| Banco Santander SA |
Santander Bank and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Banco Santander
The main advantage of trading using opposite Santander Bank and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Santander Bank vs. UniCredit SpA | Santander Bank vs. Bank Polska Kasa | Santander Bank vs. ING Bank lski | Santander Bank vs. mBank SA |
| Banco Santander vs. ING Bank lski | Banco Santander vs. Mercator Medical SA | Banco Santander vs. Medicalg | Banco Santander vs. Gaming Factory 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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