Correlation Between Ultimate Games and Santander Bank
Can any of the company-specific risk be diversified away by investing in both Ultimate Games and Santander Bank 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 Ultimate Games and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultimate Games SA and Santander Bank Polska, you can compare the effects of market volatilities on Ultimate Games and Santander Bank 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 Ultimate Games with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimate Games and Santander Bank.
Diversification Opportunities for Ultimate Games and Santander Bank
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ultimate and Santander is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ultimate Games SA and Santander Bank Polska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santander Bank Polska and Ultimate Games 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 Ultimate Games SA are associated (or correlated) with Santander Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santander Bank Polska has no effect on the direction of Ultimate Games i.e., Ultimate Games and Santander Bank go up and down completely randomly.
Pair Corralation between Ultimate Games and Santander Bank
Assuming the 90 days trading horizon Ultimate Games SA is expected to generate 0.41 times more return on investment than Santander Bank. However, Ultimate Games SA is 2.43 times less risky than Santander Bank. It trades about -0.12 of its potential returns per unit of risk. Santander Bank Polska is currently generating about -0.22 per unit of risk. If you would invest 896.00 in Ultimate Games SA on August 30, 2024 and sell it today you would lose (18.00) from holding Ultimate Games SA or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultimate Games SA vs. Santander Bank Polska
Performance |
| Timeline |
| Ultimate Games SA |
| Santander Bank Polska |
Ultimate Games and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultimate Games and Santander Bank
The main advantage of trading using opposite Ultimate Games and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimate Games position performs unexpectedly, Santander Bank 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 Santander Bank will offset losses from the drop in Santander Bank's long position.| Ultimate Games vs. Gamedust SA | Ultimate Games vs. Gaming Factory SA | Ultimate Games vs. CI Games SA | Ultimate Games vs. Monnari Trade SA |
| Santander Bank vs. New Tech Venture | Santander Bank vs. MCI Management SA | Santander Bank vs. Medicofarma Biotech SA | Santander Bank vs. Quantum Software 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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