Correlation Between INTER CARS and BANKINTER ADR
Can any of the company-specific risk be diversified away by investing in both INTER CARS and BANKINTER ADR 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 INTER CARS and BANKINTER ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and BANKINTER ADR 2007, you can compare the effects of market volatilities on INTER CARS and BANKINTER ADR 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 INTER CARS with a short position of BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and BANKINTER ADR.
Diversification Opportunities for INTER CARS and BANKINTER ADR
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between INTER and BANKINTER is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 and INTER CARS 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 INTER CARS SA are associated (or correlated) with BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of INTER CARS i.e., INTER CARS and BANKINTER ADR go up and down completely randomly.
Pair Corralation between INTER CARS and BANKINTER ADR
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.92 times more return on investment than BANKINTER ADR. However, INTER CARS SA is 1.09 times less risky than BANKINTER ADR. It trades about 0.21 of its potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.03 per unit of risk. If you would invest 10,600 in INTER CARS SA on August 31, 2024 and sell it today you would earn a total of 920.00 from holding INTER CARS SA or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. BANKINTER ADR 2007
Performance |
| Timeline |
| INTER CARS SA |
| BANKINTER ADR 2007 |
INTER CARS and BANKINTER ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and BANKINTER ADR
The main advantage of trading using opposite INTER CARS and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, BANKINTER ADR 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 BANKINTER ADR will offset losses from the drop in BANKINTER ADR's long position.| INTER CARS vs. PT Astra International | INTER CARS vs. Magna International | INTER CARS vs. Fuyao Glass Industry | INTER CARS vs. Superior Plus Corp |
| BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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