Correlation Between Bankinter and First Republic
Can any of the company-specific risk be diversified away by investing in both Bankinter and First Republic 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 Republic 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 Republic Bank, you can compare the effects of market volatilities on Bankinter and First Republic 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 Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and First Republic.
Diversification Opportunities for Bankinter and First Republic
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bankinter and First is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter SA ADR and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Bankinter i.e., Bankinter and First Republic go up and down completely randomly.
Pair Corralation between Bankinter and First Republic
Assuming the 90 days horizon Bankinter SA ADR is expected to generate 0.21 times more return on investment than First Republic. However, Bankinter SA ADR is 4.86 times less risky than First Republic. It trades about 0.04 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.14 per unit of risk. If you would invest 644.00 in Bankinter SA ADR on November 1, 2024 and sell it today you would earn a total of 254.00 from holding Bankinter SA ADR or generate 39.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 23.57% |
| Values | Daily Returns |
Bankinter SA ADR vs. First Republic Bank
Performance |
| Timeline |
| Bankinter SA ADR |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bankinter and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankinter and First Republic
The main advantage of trading using opposite Bankinter and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, First Republic 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 Republic will offset losses from the drop in First Republic's long position.| Bankinter vs. Bank Hapoalim ADR | Bankinter vs. Bank of East | Bankinter vs. BOC Hong Kong | Bankinter vs. Commercial International Bank |
| First Republic vs. Spyre Therapeutics | First Republic vs. Summit Therapeutics PLC | First Republic vs. Inhibrx | First Republic vs. Valneva SE ADR |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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