Correlation Between Alpha Bank and Bankinter
Can any of the company-specific risk be diversified away by investing in both Alpha Bank and Bankinter 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 Alpha Bank and Bankinter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Bank SA and Bankinter SA ADR, you can compare the effects of market volatilities on Alpha Bank and Bankinter 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 Alpha Bank with a short position of Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Bank and Bankinter.
Diversification Opportunities for Alpha Bank and Bankinter
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alpha and Bankinter is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Bank SA and Bankinter SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter SA ADR and Alpha Bank 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 Alpha Bank SA are associated (or correlated) with Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter SA ADR has no effect on the direction of Alpha Bank i.e., Alpha Bank and Bankinter go up and down completely randomly.
Pair Corralation between Alpha Bank and Bankinter
Assuming the 90 days horizon Alpha Bank is expected to generate 1.03 times less return on investment than Bankinter. In addition to that, Alpha Bank is 1.47 times more volatile than Bankinter SA ADR. It trades about 0.05 of its total potential returns per unit of risk. Bankinter SA ADR is currently generating about 0.07 per unit of volatility. If you would invest 503.00 in Bankinter SA ADR on November 27, 2024 and sell it today you would earn a total of 468.00 from holding Bankinter SA ADR or generate 93.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 93.3% |
| Values | Daily Returns |
Alpha Bank SA vs. Bankinter SA ADR
Performance |
| Timeline |
| Alpha Bank SA |
| Bankinter SA ADR |
Alpha Bank and Bankinter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Bank and Bankinter
The main advantage of trading using opposite Alpha Bank and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Bank position performs unexpectedly, Bankinter 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 will offset losses from the drop in Bankinter's long position.| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
| Bankinter vs. Bank Hapoalim ADR | Bankinter vs. Bank of East | Bankinter vs. BOC Hong Kong | Bankinter vs. Commercial International Bank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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