Correlation Between Santander Bank and Skyline Investment
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Skyline Investment 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 Skyline Investment 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 Skyline Investment SA, you can compare the effects of market volatilities on Santander Bank and Skyline Investment 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 Skyline Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Skyline Investment.
Diversification Opportunities for Santander Bank and Skyline Investment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santander and Skyline is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Skyline Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyline Investment 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 Skyline Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyline Investment has no effect on the direction of Santander Bank i.e., Santander Bank and Skyline Investment go up and down completely randomly.
Pair Corralation between Santander Bank and Skyline Investment
Assuming the 90 days trading horizon Santander Bank Polska is expected to under-perform the Skyline Investment. But the stock apears to be less risky and, when comparing its historical volatility, Santander Bank Polska is 1.33 times less risky than Skyline Investment. The stock trades about -0.05 of its potential returns per unit of risk. The Skyline Investment SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 160.00 in Skyline Investment SA on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Skyline Investment SA or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santander Bank Polska vs. Skyline Investment SA
Performance |
| Timeline |
| Santander Bank Polska |
| Skyline Investment |
Santander Bank and Skyline Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Skyline Investment
The main advantage of trading using opposite Santander Bank and Skyline Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Skyline Investment 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 Skyline Investment will offset losses from the drop in Skyline Investment's long position.| Santander Bank vs. mBank SA | Santander Bank vs. UF Games SA | Santander Bank vs. Echo Investment SA | Santander Bank 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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