Correlation Between Immobile and Santander Bank

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

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

Diversification Opportunities for Immobile and Santander Bank

-0.15

Correlation Coefficient

Immobile  Santander Bank

Good diversification

The 3 months correlation between Immobile and Santander is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Immobile 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 Immobile 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 Immobile 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 Immobile i.e., Immobile and Santander Bank go up and down completely randomly.

Pair Corralation between Immobile and Santander Bank

Assuming the 90 days trading horizon Immobile is expected to under-perform the Santander Bank. In addition to that, Immobile is 1.58 times more volatile than Santander Bank Polska. It trades about -0.04 of its total potential returns per unit of risk. Santander Bank Polska is currently generating about 0.01 per unit of volatility. If you would invest  45,098  in Santander Bank Polska on October 5, 2024 and sell it today you would earn a total of  992.00  from holding Santander Bank Polska or generate 2.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Immobile  vs.  Santander Bank Polska

Immobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immobile has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Immobile is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Santander Bank Polska

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Santander Bank Polska has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Santander Bank is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Immobile and Santander Bank

The main advantage of trading using opposite Immobile and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immobile 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 Immobile 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.