Correlation Between Santander Bank and Asseco South

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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

SantanderAssecoDiversified AwaySantanderAssecoDiversified Away100%
0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Santander and Asseco is 0.38. 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 1.38 times more return on investment than Asseco South. However, Santander Bank is 1.38 times more volatile than Asseco South Eastern. It trades about 0.22 of its potential returns per unit of risk. Asseco South Eastern is currently generating about 0.25 per unit of risk. If you would invest  49,220  in Santander Bank Polska on November 23, 2024 and sell it today you would earn a total of  4,200  from holding Santander Bank Polska or generate 8.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Santander Bank Polska  vs.  Asseco South Eastern

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-5
JavaScript chart by amCharts 3.21.15SPL ASE
       Timeline  
Santander Bank Polska 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Santander Bank Polska are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Santander Bank reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb440460480500520540560
Asseco South Eastern 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Asseco South Eastern are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asseco South may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb464748495051525354

Santander Bank and Asseco South Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.92-3.68-2.45-1.210.02261.342.694.055.41 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15SPL ASE
       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.
The idea behind Santander Bank Polska and Asseco South Eastern 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.

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