Correlation Between SANTANDER and Systemair

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

Diversification Opportunities for SANTANDER and Systemair

0.65

Correlation Coefficient

SANTANDER  Systemair

Poor diversification

The 3 months correlation between SANTANDER and Systemair is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of SANTANDER i.e., SANTANDER and Systemair go up and down completely randomly.

Pair Corralation between SANTANDER and Systemair

Assuming the 90 days trading horizon SANTANDER UK 10 is expected to generate 0.17 times more return on investment than Systemair. However, SANTANDER UK 10 is 5.8 times less risky than Systemair. It trades about 0.23 of its potential returns per unit of risk. Systemair AB is currently generating about 0.03 per unit of risk. If you would invest  16,765  in SANTANDER UK 10 on April 17, 2025 and sell it today you would earn a total of  530.00  from holding SANTANDER UK 10 or generate 3.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

SANTANDER UK 10  vs.  Systemair AB

SANTANDER UK 10

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SANTANDER UK 10 are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SANTANDER may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Systemair AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Systemair AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Systemair unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SANTANDER and Systemair

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

The idea behind SANTANDER UK 10 and Systemair AB 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.