Correlation Between Centrum Finansowe and Santander Bank

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

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

Diversification Opportunities for Centrum Finansowe and Santander Bank

0.65

Correlation Coefficient

Centrum Finansowe  Santander Bank

Poor diversification

The 3 months correlation between Centrum and Santander is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku 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 Centrum Finansowe 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 Centrum Finansowe Banku 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 Centrum Finansowe i.e., Centrum Finansowe and Santander Bank go up and down completely randomly.

Pair Corralation between Centrum Finansowe and Santander Bank

Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 0.85 times more return on investment than Santander Bank. However, Centrum Finansowe Banku is 1.18 times less risky than Santander Bank. It trades about -0.06 of its potential returns per unit of risk. Santander Bank Polska is currently generating about -0.05 per unit of risk. If you would invest  515.00  in Centrum Finansowe Banku on April 24, 2025 and sell it today you would lose (35.00) from holding Centrum Finansowe Banku or give up 6.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Centrum Finansowe Banku  vs.  Santander Bank Polska

Centrum Finansowe Banku

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centrum Finansowe Banku has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Centrum Finansowe is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Santander Bank Polska

Risk-Adjusted Performance

Very 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 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.

Pair Trading with Centrum Finansowe and Santander Bank

The main advantage of trading using opposite Centrum Finansowe and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe 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 Centrum Finansowe Banku 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..