Correlation Between Banco Santander and UBS Group
Can any of the company-specific risk be diversified away by investing in both Banco Santander and UBS Group 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 Banco Santander and UBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander SA and UBS Group AG, you can compare the effects of market volatilities on Banco Santander and UBS Group 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 Banco Santander with a short position of UBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and UBS Group.
Diversification Opportunities for Banco Santander and UBS Group
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and UBS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander SA and UBS Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Group AG and Banco Santander 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 Banco Santander SA are associated (or correlated) with UBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Group AG has no effect on the direction of Banco Santander i.e., Banco Santander and UBS Group go up and down completely randomly.
Pair Corralation between Banco Santander and UBS Group
Assuming the 90 days horizon Banco Santander is expected to generate 1.51 times less return on investment than UBS Group. In addition to that, Banco Santander is 3.06 times more volatile than UBS Group AG. It trades about 0.03 of its total potential returns per unit of risk. UBS Group AG is currently generating about 0.16 per unit of volatility. If you would invest 3,111 in UBS Group AG on November 1, 2024 and sell it today you would earn a total of 450.00 from holding UBS Group AG or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Banco Santander SA vs. UBS Group AG
Performance |
| Timeline |
| Banco Santander SA |
| UBS Group AG |
Banco Santander and UBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and UBS Group
The main advantage of trading using opposite Banco Santander and UBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander position performs unexpectedly, UBS Group 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 UBS Group will offset losses from the drop in UBS Group's long position.| Banco Santander vs. Banco Bilbao Viscaya | Banco Santander vs. Barclays PLC ADR | Banco Santander vs. ING Group NV | Banco Santander vs. HSBC Holdings PLC |
| UBS Group vs. Citigroup | UBS Group vs. Barclays PLC ADR | UBS Group vs. HSBC Holdings PLC | UBS Group vs. Nu Holdings |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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