Correlation Between Bankinter and CaixaBank
Can any of the company-specific risk be diversified away by investing in both Bankinter and CaixaBank 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 CaixaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankinter SA ADR and CaixaBank SA, you can compare the effects of market volatilities on Bankinter and CaixaBank 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 CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and CaixaBank.
Diversification Opportunities for Bankinter and CaixaBank
Very good diversification
The 3 months correlation between Bankinter and CaixaBank is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter SA ADR and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA 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 ADR are associated (or correlated) with CaixaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaixaBank SA has no effect on the direction of Bankinter i.e., Bankinter and CaixaBank go up and down completely randomly.
Pair Corralation between Bankinter and CaixaBank
Assuming the 90 days horizon Bankinter SA ADR is expected to generate 0.74 times more return on investment than CaixaBank. However, Bankinter SA ADR is 1.35 times less risky than CaixaBank. It trades about -0.01 of its potential returns per unit of risk. CaixaBank SA is currently generating about -0.1 per unit of risk. If you would invest 797.00 in Bankinter SA ADR on August 30, 2024 and sell it today you would lose (12.00) from holding Bankinter SA ADR or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Bankinter SA ADR vs. CaixaBank SA
Performance |
| Timeline |
| Bankinter SA ADR |
| CaixaBank SA |
Bankinter and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankinter and CaixaBank
The main advantage of trading using opposite Bankinter and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, CaixaBank 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 CaixaBank will offset losses from the drop in CaixaBank's long position.| Bankinter vs. Bank Hapoalim ADR | Bankinter vs. Bank of East | Bankinter vs. BOC Hong Kong | Bankinter vs. Commercial International Bank |
| CaixaBank vs. Bankinter SA ADR | CaixaBank vs. First Horizon | CaixaBank vs. JAPAN POST BANK | CaixaBank vs. JAPAN POST BANK |
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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