Correlation Between Santander Bank and Vigo System
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Vigo System 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 Vigo System 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 Vigo System SA, you can compare the effects of market volatilities on Santander Bank and Vigo System 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 Vigo System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Vigo System.
Diversification Opportunities for Santander Bank and Vigo System
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Santander and Vigo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Vigo System SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vigo System 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 Vigo System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vigo System SA has no effect on the direction of Santander Bank i.e., Santander Bank and Vigo System go up and down completely randomly.
Pair Corralation between Santander Bank and Vigo System
Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 0.93 times more return on investment than Vigo System. However, Santander Bank Polska is 1.08 times less risky than Vigo System. It trades about -0.05 of its potential returns per unit of risk. Vigo System SA is currently generating about -0.08 per unit of risk. If you would invest 51,000 in Santander Bank Polska on September 1, 2024 and sell it today you would lose (7,280) from holding Santander Bank Polska or give up 14.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Santander Bank Polska vs. Vigo System SA
Performance |
| Timeline |
| Santander Bank Polska |
| Vigo System SA |
Santander Bank and Vigo System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santander Bank and Vigo System
The main advantage of trading using opposite Santander Bank and Vigo System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Vigo System 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 Vigo System will offset losses from the drop in Vigo System's long position.| Santander Bank vs. ING Bank lski | Santander Bank vs. PMPG Polskie Media | Santander Bank vs. Noble Financials SA | Santander Bank vs. New Tech Venture |
| Vigo System vs. Banco Santander SA | Vigo System vs. UniCredit SpA | Vigo System vs. CEZ as | Vigo System vs. Polski Koncern Naftowy |
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 CEOs Directory module to screen CEOs from public companies around the world.
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