Correlation Between Santander Bank and COMPUTERSHARE

Can any of the company-specific risk be diversified away by investing in both Santander Bank and COMPUTERSHARE 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 COMPUTERSHARE 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 COMPUTERSHARE, you can compare the effects of market volatilities on Santander Bank and COMPUTERSHARE 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 COMPUTERSHARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and COMPUTERSHARE.

Diversification Opportunities for Santander Bank and COMPUTERSHARE

0.0

Correlation Coefficient

Santander Bank  COMPUTERSHARE

Pay attention - limited upside

The 3 months correlation between Santander and COMPUTERSHARE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and COMPUTERSHARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUTERSHARE 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 COMPUTERSHARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUTERSHARE has no effect on the direction of Santander Bank i.e., Santander Bank and COMPUTERSHARE go up and down completely randomly.

Pair Corralation between Santander Bank and COMPUTERSHARE

If you would invest  1,620  in COMPUTERSHARE on October 24, 2024 and sell it today you would earn a total of  420.00  from holding COMPUTERSHARE or generate 25.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Santander Bank Polska  vs.  COMPUTERSHARE

Santander Bank Polska

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Santander Bank Polska has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Santander Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COMPUTERSHARE

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, COMPUTERSHARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Santander Bank and COMPUTERSHARE

The main advantage of trading using opposite Santander Bank and COMPUTERSHARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, COMPUTERSHARE 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 COMPUTERSHARE will offset losses from the drop in COMPUTERSHARE's long position.

The idea behind Santander Bank Polska and COMPUTERSHARE 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.