Correlation Between Banco Santander and Bank Utica

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

By analyzing existing cross correlation between Banco Santander Brasil and Bank Utica Ny, you can compare the effects of market volatilities on Banco Santander and Bank Utica 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 Bank Utica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Bank Utica.

Diversification Opportunities for Banco Santander and Bank Utica

-0.77

Correlation Coefficient

Banco Santander  Bank Utica

Pay attention - limited upside

The 3 months correlation between Banco and Bank is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil and Bank Utica Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Utica Ny 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 Brasil are associated (or correlated) with Bank Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Utica Ny has no effect on the direction of Banco Santander i.e., Banco Santander and Bank Utica go up and down completely randomly.

Pair Corralation between Banco Santander and Bank Utica

Given the investment horizon of 90 days Banco Santander Brasil is expected to under-perform the Bank Utica. In addition to that, Banco Santander is 1.12 times more volatile than Bank Utica Ny. It trades about -0.12 of its total potential returns per unit of risk. Bank Utica Ny is currently generating about 0.03 per unit of volatility. If you would invest  48,559  in Bank Utica Ny on October 4, 2024 and sell it today you would earn a total of  491.00  from holding Bank Utica Ny or generate 1.01% return on investment over 90 days.

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

Banco Santander Brasil  vs.  Bank Utica Ny

Banco Santander Brasil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Santander Brasil has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Bank Utica Ny

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Utica Ny are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Bank Utica disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banco Santander and Bank Utica

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

The idea behind Banco Santander Brasil and Bank Utica Ny 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.