Correlation Between Santander Bank and TEN SQUARE

Can any of the company-specific risk be diversified away by investing in both Santander Bank and TEN SQUARE 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 TEN SQUARE 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 TEN SQUARE GAMES, you can compare the effects of market volatilities on Santander Bank and TEN SQUARE 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 TEN SQUARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santander Bank and TEN SQUARE.

Diversification Opportunities for Santander Bank and TEN SQUARE

0.77

Correlation Coefficient

Santander Bank  TEN SQUARE

Poor diversification

The 3 months correlation between Santander and TEN is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and TEN SQUARE GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEN SQUARE GAMES 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 TEN SQUARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEN SQUARE GAMES has no effect on the direction of Santander Bank i.e., Santander Bank and TEN SQUARE go up and down completely randomly.

Pair Corralation between Santander Bank and TEN SQUARE

Assuming the 90 days trading horizon Santander Bank is expected to generate 1.03 times less return on investment than TEN SQUARE. But when comparing it to its historical volatility, Santander Bank Polska is 1.14 times less risky than TEN SQUARE. It trades about 0.19 of its potential returns per unit of risk. TEN SQUARE GAMES is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,200  in TEN SQUARE GAMES on December 30, 2024 and sell it today you would earn a total of  1,740  from holding TEN SQUARE GAMES or generate 24.17% return on investment over 90 days.

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

Santander Bank Polska  vs.  TEN SQUARE GAMES

Santander Bank Polska

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Santander Bank Polska are ranked lower than 14 (%) 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.

TEN SQUARE GAMES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TEN SQUARE GAMES are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, TEN SQUARE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Santander Bank and TEN SQUARE

The main advantage of trading using opposite Santander Bank and TEN SQUARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santander Bank position performs unexpectedly, TEN SQUARE 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 TEN SQUARE will offset losses from the drop in TEN SQUARE's long position.

The idea behind Santander Bank Polska and TEN SQUARE GAMES 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.