Correlation Between Echo Investment and Santander Bank

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

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

Diversification Opportunities for Echo Investment and Santander Bank

-0.01

Correlation Coefficient

Echo Investment  Santander Bank

Good diversification

The 3 months correlation between Echo and Santander is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment 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 Echo Investment 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 Echo Investment 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 Echo Investment i.e., Echo Investment and Santander Bank go up and down completely randomly.

Pair Corralation between Echo Investment and Santander Bank

Assuming the 90 days trading horizon Echo Investment SA is expected to generate 0.71 times more return on investment than Santander Bank. However, Echo Investment SA is 1.41 times less risky than Santander Bank. It trades about 0.16 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  468.00  in Echo Investment SA on April 25, 2025 and sell it today you would earn a total of  68.00  from holding Echo Investment SA or generate 14.53% return on investment over 90 days.

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

Echo Investment SA  vs.  Santander Bank Polska

Echo Investment SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Echo Investment SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Echo Investment reported solid returns over the last few months and may actually be approaching a breakup point.

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 Echo Investment and Santander Bank

The main advantage of trading using opposite Echo Investment and Santander Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment 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 Echo Investment 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.