Correlation Between Santander Bank and CCC SA

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

Diversification Opportunities for Santander Bank and CCC SA

0.68

Correlation Coefficient

Santander Bank  CCC SA

Poor diversification

The 3 months correlation between Santander and CCC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Santander Bank Polska and CCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC 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 CCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC SA has no effect on the direction of Santander Bank i.e., Santander Bank and CCC SA go up and down completely randomly.

Pair Corralation between Santander Bank and CCC SA

Assuming the 90 days trading horizon Santander Bank Polska is expected to under-perform the CCC SA. But the stock apears to be less risky and, when comparing its historical volatility, Santander Bank Polska is 1.45 times less risky than CCC SA. The stock trades about -0.04 of its potential returns per unit of risk. The CCC SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  22,610  in CCC SA on April 22, 2025 and sell it today you would lose (1,220) from holding CCC SA or give up 5.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Santander Bank Polska  vs.  CCC SA

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 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.

CCC SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, CCC SA 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 Santander Bank and CCC SA

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

The idea behind Santander Bank Polska and CCC SA 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..