Correlation Between BANKINTER ADR and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR and Tianjin Capital 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 Tianjin Capital 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 Tianjin Capital Environmental, you can compare the effects of market volatilities on BANKINTER ADR and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Tianjin Capital.
Diversification Opportunities for BANKINTER ADR and Tianjin Capital
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BANKINTER and Tianjin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and Tianjin Capital go up and down completely randomly.
Pair Corralation between BANKINTER ADR and Tianjin Capital
Assuming the 90 days horizon BANKINTER ADR 2007 is expected to generate 1.06 times more return on investment than Tianjin Capital. However, BANKINTER ADR is 1.06 times more volatile than Tianjin Capital Environmental. It trades about 0.27 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.05 per unit of risk. If you would invest 674.00 in BANKINTER ADR 2007 on October 30, 2024 and sell it today you would earn a total of 116.00 from holding BANKINTER ADR 2007 or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANKINTER ADR 2007 vs. Tianjin Capital Environmental
Performance |
| Timeline |
| BANKINTER ADR 2007 |
| Tianjin Capital Envi |
BANKINTER ADR and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANKINTER ADR and Tianjin Capital
The main advantage of trading using opposite BANKINTER ADR and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.| BANKINTER ADR vs. PennantPark Investment | BANKINTER ADR vs. Gladstone Investment | BANKINTER ADR vs. DATANG INTL POW | BANKINTER ADR vs. China Datang |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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