Correlation Between Ultimate Games and Santander Bank

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

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

Diversification Opportunities for Ultimate Games and Santander Bank

-0.22

Correlation Coefficient

Ultimate Games  Santander Bank

Very good diversification

The 3 months correlation between Ultimate and Santander is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ultimate Games SA 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 Ultimate Games 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 Ultimate Games SA 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 Ultimate Games i.e., Ultimate Games and Santander Bank go up and down completely randomly.

Pair Corralation between Ultimate Games and Santander Bank

Assuming the 90 days trading horizon Ultimate Games SA is expected to under-perform the Santander Bank. In addition to that, Ultimate Games is 1.3 times more volatile than Santander Bank Polska. It trades about -0.03 of its total potential returns per unit of risk. Santander Bank Polska is currently generating about 0.08 per unit of volatility. If you would invest  24,567  in Santander Bank Polska on October 5, 2024 and sell it today you would earn a total of  21,523  from holding Santander Bank Polska or generate 87.61% return on investment over 90 days.

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

Ultimate Games SA  vs.  Santander Bank Polska

Ultimate Games SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultimate Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise 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 Ultimate Games and Santander Bank

The main advantage of trading using opposite Ultimate Games and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimate Games 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 Ultimate Games SA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.