Correlation Between Bankinter and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Bankinter and XLMedia PLC 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 and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankinter SA and XLMedia PLC, you can compare the effects of market volatilities on Bankinter and XLMedia PLC 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 with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and XLMedia PLC.
Diversification Opportunities for Bankinter and XLMedia PLC
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bankinter and XLMedia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter SA and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and Bankinter 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 SA are associated (or correlated) with XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Bankinter i.e., Bankinter and XLMedia PLC go up and down completely randomly.
Pair Corralation between Bankinter and XLMedia PLC
Assuming the 90 days trading horizon Bankinter SA is expected to generate 0.17 times more return on investment than XLMedia PLC. However, Bankinter SA is 5.95 times less risky than XLMedia PLC. It trades about 0.14 of its potential returns per unit of risk. XLMedia PLC is currently generating about -0.01 per unit of risk. If you would invest 758.00 in Bankinter SA on November 3, 2024 and sell it today you would earn a total of 57.00 from holding Bankinter SA or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankinter SA vs. XLMedia PLC
Performance |
| Timeline |
| Bankinter SA |
| XLMedia PLC |
Bankinter and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankinter and XLMedia PLC
The main advantage of trading using opposite Bankinter and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Bankinter vs. CHEMICAL INDUSTRIES | Bankinter vs. PPHE HOTEL GROUP | Bankinter vs. Soken Chemical Engineering | Bankinter vs. TIANDE CHEMICAL |
| XLMedia PLC vs. TROPHY GAMES DEV | XLMedia PLC vs. Scientific Games | XLMedia PLC vs. DETALION GAMES SA | XLMedia PLC vs. FIRST SHIP LEASE |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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