Correlation Between BANKINTER ADR and Yue Da
Can any of the company-specific risk be diversified away by investing in both BANKINTER ADR and Yue Da 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 Yue Da 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 Yue Da International, you can compare the effects of market volatilities on BANKINTER ADR and Yue Da 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 Yue Da. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Yue Da.
Diversification Opportunities for BANKINTER ADR and Yue Da
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BANKINTER and Yue is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and Yue Da International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yue Da International 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 Yue Da. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yue Da International has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and Yue Da go up and down completely randomly.
Pair Corralation between BANKINTER ADR and Yue Da
Assuming the 90 days horizon BANKINTER ADR is expected to generate 65.37 times less return on investment than Yue Da. But when comparing it to its historical volatility, BANKINTER ADR 2007 is 23.24 times less risky than Yue Da. It trades about 0.05 of its potential returns per unit of risk. Yue Da International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.14 in Yue Da International on September 12, 2024 and sell it today you would earn a total of 1.41 from holding Yue Da International or generate 1007.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BANKINTER ADR 2007 vs. Yue Da International
Performance |
| Timeline |
| BANKINTER ADR 2007 |
| Yue Da International |
BANKINTER ADR and Yue Da Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANKINTER ADR and Yue Da
The main advantage of trading using opposite BANKINTER ADR and Yue Da positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR position performs unexpectedly, Yue Da 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 Yue Da will offset losses from the drop in Yue Da's long position.| BANKINTER ADR vs. Citic Telecom International | BANKINTER ADR vs. CHINA TELECOM H | BANKINTER ADR vs. American Homes 4 | BANKINTER ADR vs. Zoom Video Communications |
| Yue Da vs. BANKINTER ADR 2007 | Yue Da vs. The Yokohama Rubber | Yue Da vs. MBANK | Yue Da vs. PT Bank Maybank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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