Correlation Between BANKINTER ADR and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR and Gaztransport Technigaz 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 BANKINTER ADR and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANKINTER ADR 2007 and Gaztransport Technigaz SA, you can compare the effects of market volatilities on BANKINTER ADR and Gaztransport Technigaz 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 BANKINTER ADR with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Gaztransport Technigaz.
Diversification Opportunities for BANKINTER ADR and Gaztransport Technigaz
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANKINTER and Gaztransport is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and BANKINTER ADR 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 BANKINTER ADR 2007 are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between BANKINTER ADR and Gaztransport Technigaz
Assuming the 90 days horizon BANKINTER ADR 2007 is expected to generate 1.18 times more return on investment than Gaztransport Technigaz. However, BANKINTER ADR is 1.18 times more volatile than Gaztransport Technigaz SA. It trades about 0.2 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about -0.17 per unit of risk. If you would invest 689.00 in BANKINTER ADR 2007 on September 12, 2024 and sell it today you would earn a total of 56.00 from holding BANKINTER ADR 2007 or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANKINTER ADR 2007 vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| BANKINTER ADR 2007 |
| Gaztransport Technigaz |
BANKINTER ADR and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANKINTER ADR and Gaztransport Technigaz
The main advantage of trading using opposite BANKINTER ADR and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| BANKINTER ADR vs. Citic Telecom International | BANKINTER ADR vs. CHINA TELECOM H | BANKINTER ADR vs. American Homes 4 | BANKINTER ADR vs. Zoom Video Communications |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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