Correlation Between BANKINTER ADR and DiamondRock Hospitality
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR and DiamondRock Hospitality 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 DiamondRock Hospitality 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 DiamondRock Hospitality, you can compare the effects of market volatilities on BANKINTER ADR and DiamondRock Hospitality 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 DiamondRock Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and DiamondRock Hospitality.
Diversification Opportunities for BANKINTER ADR and DiamondRock Hospitality
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BANKINTER and DiamondRock is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and DiamondRock Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiamondRock Hospitality 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 DiamondRock Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiamondRock Hospitality has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and DiamondRock Hospitality go up and down completely randomly.
Pair Corralation between BANKINTER ADR and DiamondRock Hospitality
Assuming the 90 days horizon BANKINTER ADR 2007 is expected to generate 0.64 times more return on investment than DiamondRock Hospitality. However, BANKINTER ADR 2007 is 1.56 times less risky than DiamondRock Hospitality. It trades about 0.06 of its potential returns per unit of risk. DiamondRock Hospitality is currently generating about 0.03 per unit of risk. If you would invest 490.00 in BANKINTER ADR 2007 on August 31, 2024 and sell it today you would earn a total of 225.00 from holding BANKINTER ADR 2007 or generate 45.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANKINTER ADR 2007 vs. DiamondRock Hospitality
Performance |
| Timeline |
| BANKINTER ADR 2007 |
| DiamondRock Hospitality |
BANKINTER ADR and DiamondRock Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANKINTER ADR and DiamondRock Hospitality
The main advantage of trading using opposite BANKINTER ADR and DiamondRock Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR position performs unexpectedly, DiamondRock Hospitality 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 DiamondRock Hospitality will offset losses from the drop in DiamondRock Hospitality's long position.| BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc |
| DiamondRock Hospitality vs. Sotherly Hotels | DiamondRock Hospitality vs. Superior Plus Corp | DiamondRock Hospitality vs. NMI Holdings | DiamondRock Hospitality vs. Origin Agritech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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