Correlation Between Bankinter and Asturiana
Can any of the company-specific risk be diversified away by investing in both Bankinter and Asturiana 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 Asturiana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankinter and Asturiana de Laminados, you can compare the effects of market volatilities on Bankinter and Asturiana 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 Asturiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and Asturiana.
Diversification Opportunities for Bankinter and Asturiana
Poor diversification
The 3 months correlation between Bankinter and Asturiana is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and Asturiana de Laminados in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asturiana de Laminados 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 are associated (or correlated) with Asturiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asturiana de Laminados has no effect on the direction of Bankinter i.e., Bankinter and Asturiana go up and down completely randomly.
Pair Corralation between Bankinter and Asturiana
Assuming the 90 days trading horizon Bankinter is expected to generate 0.39 times more return on investment than Asturiana. However, Bankinter is 2.59 times less risky than Asturiana. It trades about 0.04 of its potential returns per unit of risk. Asturiana de Laminados is currently generating about -0.03 per unit of risk. If you would invest 571.00 in Bankinter on September 3, 2024 and sell it today you would earn a total of 178.00 from holding Bankinter or generate 31.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankinter vs. Asturiana de Laminados
Performance |
| Timeline |
| Bankinter |
| Asturiana de Laminados |
Bankinter and Asturiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankinter and Asturiana
The main advantage of trading using opposite Bankinter and Asturiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, Asturiana 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 Asturiana will offset losses from the drop in Asturiana's long position.The idea behind Bankinter and Asturiana de Laminados pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Asturiana vs. Caixabank SA | Asturiana vs. Borges Agricultural Industrial | Asturiana vs. Techo Hogar SOCIMI, | Asturiana vs. Neinor Homes SLU |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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