Correlation Between SANTANDER and UBS Plc

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SANTANDER and UBS Plc 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 and UBS Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANTANDER UK 10 and UBS plc , you can compare the effects of market volatilities on SANTANDER and UBS Plc 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 with a short position of UBS Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and UBS Plc.

Diversification Opportunities for SANTANDER and UBS Plc

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between SANTANDER and UBS is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and UBS plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS plc and 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 SANTANDER UK 10 are associated (or correlated) with UBS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS plc has no effect on the direction of SANTANDER i.e., SANTANDER and UBS Plc go up and down completely randomly.

Pair Corralation between SANTANDER and UBS Plc

Assuming the 90 days trading horizon SANTANDER is expected to generate 24.52 times less return on investment than UBS Plc. But when comparing it to its historical volatility, SANTANDER UK 10 is 2.45 times less risky than UBS Plc. It trades about 0.02 of its potential returns per unit of risk. UBS plc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  845,900  in UBS plc on September 10, 2024 and sell it today you would earn a total of  74,500  from holding UBS plc or generate 8.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.46%
ValuesDaily Returns

SANTANDER UK 10  vs.  UBS plc

 Performance 
       Timeline  
SANTANDER UK 10 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in SANTANDER UK 10 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, SANTANDER is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
UBS plc 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in UBS plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, UBS Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SANTANDER and UBS Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SANTANDER and UBS Plc

The main advantage of trading using opposite SANTANDER and UBS Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER position performs unexpectedly, UBS Plc 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 Plc will offset losses from the drop in UBS Plc's long position.
The idea behind SANTANDER UK 10 and UBS plc 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.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Global Correlations
Find global opportunities by holding instruments from different markets
Stocks Directory
Find actively traded stocks across global markets
Fundamental Analysis
View fundamental data based on most recent published financial statements