Correlation Between Bankinter and First Citizens
Can any of the company-specific risk be diversified away by investing in both Bankinter and First Citizens 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 First Citizens 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 First Citizens BancShares, you can compare the effects of market volatilities on Bankinter and First Citizens 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 First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and First Citizens.
Diversification Opportunities for Bankinter and First Citizens
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bankinter and First is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter SA ADR and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Bankinter i.e., Bankinter and First Citizens go up and down completely randomly.
Pair Corralation between Bankinter and First Citizens
Assuming the 90 days horizon Bankinter is expected to generate 103.79 times less return on investment than First Citizens. But when comparing it to its historical volatility, Bankinter SA ADR is 1.32 times less risky than First Citizens. It trades about 0.0 of its potential returns per unit of risk. First Citizens BancShares is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 193,571 in First Citizens BancShares on September 1, 2024 and sell it today you would earn a total of 35,929 from holding First Citizens BancShares or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankinter SA ADR vs. First Citizens BancShares
Performance |
| Timeline |
| Bankinter SA ADR |
| First Citizens BancShares |
Bankinter and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankinter and First Citizens
The main advantage of trading using opposite Bankinter and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, First Citizens 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 First Citizens will offset losses from the drop in First Citizens' long position.| Bankinter vs. Piraeus Bank SA | Bankinter vs. Turkiye Garanti Bankasi | Bankinter vs. Delhi Bank Corp | Bankinter vs. Uwharrie Capital Corp |
| First Citizens vs. Zions Bancorporation | First Citizens vs. KeyCorp | First Citizens vs. Comerica | First Citizens vs. First Horizon National |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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