Correlation Between Bankinter and PSB Holdings
Can any of the company-specific risk be diversified away by investing in both Bankinter and PSB Holdings 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 PSB Holdings 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 PSB Holdings, you can compare the effects of market volatilities on Bankinter and PSB Holdings 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 PSB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and PSB Holdings.
Diversification Opportunities for Bankinter and PSB Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bankinter and PSB is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter SA ADR and PSB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSB Holdings 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 PSB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSB Holdings has no effect on the direction of Bankinter i.e., Bankinter and PSB Holdings go up and down completely randomly.
Pair Corralation between Bankinter and PSB Holdings
Assuming the 90 days horizon Bankinter SA ADR is expected to generate 1.9 times more return on investment than PSB Holdings. However, Bankinter is 1.9 times more volatile than PSB Holdings. It trades about 0.03 of its potential returns per unit of risk. PSB Holdings is currently generating about 0.04 per unit of risk. If you would invest 627.00 in Bankinter SA ADR on August 30, 2024 and sell it today you would earn a total of 158.00 from holding Bankinter SA ADR or generate 25.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 86.47% |
| Values | Daily Returns |
Bankinter SA ADR vs. PSB Holdings
Performance |
| Timeline |
| Bankinter SA ADR |
| PSB Holdings |
Bankinter and PSB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankinter and PSB Holdings
The main advantage of trading using opposite Bankinter and PSB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, PSB Holdings 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 PSB Holdings will offset losses from the drop in PSB Holdings' long position.| Bankinter vs. Bank Hapoalim ADR | Bankinter vs. Bank of East | Bankinter vs. BOC Hong Kong | Bankinter vs. Commercial International Bank |
| PSB Holdings vs. Eagle Financial Services | PSB Holdings vs. National Capital Bank | PSB Holdings vs. Community Heritage Financial | PSB Holdings vs. Citizens Financial Corp |
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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