Correlation Between X Trade and Santander Bank
Can any of the company-specific risk be diversified away by investing in both X Trade 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 X Trade and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Trade Brokers and Santander Bank Polska, you can compare the effects of market volatilities on X Trade 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 X Trade with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Trade and Santander Bank.
Diversification Opportunities for X Trade and Santander Bank
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between XTB and Santander is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding X Trade Brokers 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 X Trade 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 X Trade Brokers 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 X Trade i.e., X Trade and Santander Bank go up and down completely randomly.
Pair Corralation between X Trade and Santander Bank
Assuming the 90 days trading horizon X Trade Brokers is expected to generate 0.64 times more return on investment than Santander Bank. However, X Trade Brokers is 1.56 times less risky than Santander Bank. It trades about 0.24 of its potential returns per unit of risk. Santander Bank Polska is currently generating about -0.02 per unit of risk. If you would invest 6,562 in X Trade Brokers on August 29, 2024 and sell it today you would earn a total of 518.00 from holding X Trade Brokers or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
X Trade Brokers vs. Santander Bank Polska
Performance |
| Timeline |
| X Trade Brokers |
| Santander Bank Polska |
X Trade and Santander Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Trade and Santander Bank
The main advantage of trading using opposite X Trade and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Trade 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.The idea behind X Trade Brokers and Santander Bank Polska pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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