Correlation Between BANKINTER ADR and National Bank
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR and National Bank 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 National Bank 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 National Bank Holdings, you can compare the effects of market volatilities on BANKINTER ADR and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and National Bank.
Diversification Opportunities for BANKINTER ADR and National Bank
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between BANKINTER and National is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and National Bank go up and down completely randomly.
Pair Corralation between BANKINTER ADR and National Bank
Assuming the 90 days horizon BANKINTER ADR 2007 is expected to generate 0.96 times more return on investment than National Bank. However, BANKINTER ADR 2007 is 1.04 times less risky than National Bank. It trades about 0.05 of its potential returns per unit of risk. National Bank Holdings is currently generating about 0.02 per unit of risk. If you would invest 486.00 in BANKINTER ADR 2007 on August 30, 2024 and sell it today you would earn a total of 239.00 from holding BANKINTER ADR 2007 or generate 49.18% 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. National Bank Holdings
Performance |
Timeline |
BANKINTER ADR 2007 |
National Bank Holdings |
BANKINTER ADR and National Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANKINTER ADR and National Bank
The main advantage of trading using opposite BANKINTER ADR and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc | BANKINTER ADR vs. Apple Inc |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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