Correlation Between Cresud SACIF and Santander Bank

Can any of the company-specific risk be diversified away by investing in both Cresud SACIF 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 Cresud SACIF and Santander Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cresud SACIF y and Santander Bank Polska, you can compare the effects of market volatilities on Cresud SACIF 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 Cresud SACIF with a short position of Santander Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SACIF and Santander Bank.

Diversification Opportunities for Cresud SACIF and Santander Bank

0.04

Correlation Coefficient

Cresud SACIF  Santander Bank

Significant diversification

The 3 months correlation between Cresud and Santander is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y 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 Cresud SACIF 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 Cresud SACIF y 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 Cresud SACIF i.e., Cresud SACIF and Santander Bank go up and down completely randomly.

Pair Corralation between Cresud SACIF and Santander Bank

Assuming the 90 days horizon Cresud SACIF is expected to generate 2.54 times less return on investment than Santander Bank. In addition to that, Cresud SACIF is 1.35 times more volatile than Santander Bank Polska. It trades about 0.03 of its total potential returns per unit of risk. Santander Bank Polska is currently generating about 0.1 per unit of volatility. If you would invest  10,410  in Santander Bank Polska on October 4, 2024 and sell it today you would earn a total of  390.00  from holding Santander Bank Polska or generate 3.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Cresud SACIF y  vs.  Santander Bank Polska

Cresud SACIF y

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

Santander Bank Polska

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Santander Bank Polska are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Santander Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cresud SACIF and Santander Bank

The main advantage of trading using opposite Cresud SACIF and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF 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 Cresud SACIF y 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.