Correlation Between Santander Bank and Asseco South
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Asseco South 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 Asseco South 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 Asseco South Eastern, you can compare the effects of market volatilities on Santander Bank and Asseco South 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 Asseco South. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Asseco South.
Diversification Opportunities for Santander Bank and Asseco South
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santander and Asseco is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Asseco South Eastern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asseco South Eastern 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 Asseco South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asseco South Eastern has no effect on the direction of Santander Bank i.e., Santander Bank and Asseco South go up and down completely randomly.
Pair Corralation between Santander Bank and Asseco South
Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 1.21 times more return on investment than Asseco South. However, Santander Bank is 1.21 times more volatile than Asseco South Eastern. It trades about 0.08 of its potential returns per unit of risk. Asseco South Eastern is currently generating about 0.02 per unit of risk. If you would invest 26,497 in Santander Bank Polska on November 23, 2024 and sell it today you would earn a total of 26,923 from holding Santander Bank Polska or generate 101.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Santander Bank Polska vs. Asseco South Eastern
Performance |
Timeline |
Santander Bank Polska |
Asseco South Eastern |
Santander Bank and Asseco South Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Santander Bank and Asseco South
The main advantage of trading using opposite Santander Bank and Asseco South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Asseco South 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 Asseco South will offset losses from the drop in Asseco South's long position.Santander Bank vs. PZ Cormay SA | ||
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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