Correlation Between BANKINTER ADR and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR and Deutsche Telekom 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 Deutsche Telekom 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 Deutsche Telekom AG, you can compare the effects of market volatilities on BANKINTER ADR and Deutsche Telekom 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 Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Deutsche Telekom.
Diversification Opportunities for BANKINTER ADR and Deutsche Telekom
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANKINTER and Deutsche is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom 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 Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and Deutsche Telekom go up and down completely randomly.
Pair Corralation between BANKINTER ADR and Deutsche Telekom
Assuming the 90 days horizon BANKINTER ADR 2007 is expected to generate 2.29 times more return on investment than Deutsche Telekom. However, BANKINTER ADR is 2.29 times more volatile than Deutsche Telekom AG. It trades about 0.15 of its potential returns per unit of risk. Deutsche Telekom AG is currently generating about -0.09 per unit of risk. If you would invest 715.00 in BANKINTER ADR 2007 on October 14, 2024 and sell it today you would earn a total of 30.00 from holding BANKINTER ADR 2007 or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANKINTER ADR 2007 vs. Deutsche Telekom AG
Performance |
| Timeline |
| BANKINTER ADR 2007 |
| Deutsche Telekom |
BANKINTER ADR and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANKINTER ADR and Deutsche Telekom
The main advantage of trading using opposite BANKINTER ADR and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| BANKINTER ADR vs. Gaztransport Technigaz SA | BANKINTER ADR vs. SPORT LISBOA E | BANKINTER ADR vs. SOLSTAD OFFSHORE NK | BANKINTER ADR vs. Solstad Offshore ASA |
| Deutsche Telekom vs. BANKINTER ADR 2007 | Deutsche Telekom vs. The Hanover Insurance | Deutsche Telekom vs. GigaMedia | Deutsche Telekom vs. Townsquare Media |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |