Correlation Between BANKINTER ADR and Air Liquide
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR and Air Liquide 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 Air Liquide 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 Air Liquide SA, you can compare the effects of market volatilities on BANKINTER ADR and Air Liquide 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 Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Air Liquide.
Diversification Opportunities for BANKINTER ADR and Air Liquide
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BANKINTER and Air is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA 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 Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and Air Liquide go up and down completely randomly.
Pair Corralation between BANKINTER ADR and Air Liquide
Assuming the 90 days horizon BANKINTER ADR 2007 is expected to generate 1.98 times more return on investment than Air Liquide. However, BANKINTER ADR is 1.98 times more volatile than Air Liquide SA. It trades about 0.05 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.01 per unit of risk. If you would invest 549.00 in BANKINTER ADR 2007 on September 4, 2024 and sell it today you would earn a total of 156.00 from holding BANKINTER ADR 2007 or generate 28.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BANKINTER ADR 2007 vs. Air Liquide SA
Performance |
| Timeline |
| BANKINTER ADR 2007 |
| Air Liquide SA |
BANKINTER ADR and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANKINTER ADR and Air Liquide
The main advantage of trading using opposite BANKINTER ADR and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR position performs unexpectedly, Air Liquide 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 Air Liquide will offset losses from the drop in Air Liquide's long position.| BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc |
| Air Liquide vs. The Hanover Insurance | Air Liquide vs. BANKINTER ADR 2007 | Air Liquide vs. International Game Technology | Air Liquide vs. TSOGO SUN GAMING |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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