Correlation Between Santander Bank and Play2Chill
Can any of the company-specific risk be diversified away by investing in both Santander Bank and Play2Chill 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 Play2Chill 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 Play2Chill SA, you can compare the effects of market volatilities on Santander Bank and Play2Chill 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 Play2Chill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and Play2Chill.
Diversification Opportunities for Santander Bank and Play2Chill
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Santander and Play2Chill is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and Play2Chill SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Play2Chill SA 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 Play2Chill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Play2Chill SA has no effect on the direction of Santander Bank i.e., Santander Bank and Play2Chill go up and down completely randomly.
Pair Corralation between Santander Bank and Play2Chill
Assuming the 90 days trading horizon Santander Bank Polska is expected to generate 0.59 times more return on investment than Play2Chill. However, Santander Bank Polska is 1.68 times less risky than Play2Chill. It trades about 0.07 of its potential returns per unit of risk. Play2Chill SA is currently generating about -0.02 per unit of risk. If you would invest 26,550 in Santander Bank Polska on October 5, 2024 and sell it today you would earn a total of 19,540 from holding Santander Bank Polska or generate 73.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 94.5% |
Values | Daily Returns |
Santander Bank Polska vs. Play2Chill SA
Performance |
Timeline |
Santander Bank Polska |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Play2Chill SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Santander Bank and Play2Chill Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Santander Bank and Play2Chill
The main advantage of trading using opposite Santander Bank and Play2Chill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, Play2Chill 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 Play2Chill will offset losses from the drop in Play2Chill's long position.Santander Bank vs. Bank Ochrony rodowiska | Santander Bank vs. Asseco South Eastern | Santander Bank vs. IMC SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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