Correlation Between Bankinter and Millenium Hotels
Can any of the company-specific risk be diversified away by investing in both Bankinter and Millenium Hotels 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 Millenium Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankinter and Millenium Hotels Real, you can compare the effects of market volatilities on Bankinter and Millenium Hotels 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 Millenium Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and Millenium Hotels.
Diversification Opportunities for Bankinter and Millenium Hotels
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bankinter and Millenium is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and Millenium Hotels Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millenium Hotels Real 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 Millenium Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millenium Hotels Real has no effect on the direction of Bankinter i.e., Bankinter and Millenium Hotels go up and down completely randomly.
Pair Corralation between Bankinter and Millenium Hotels
Assuming the 90 days trading horizon Bankinter is expected to generate 0.41 times more return on investment than Millenium Hotels. However, Bankinter is 2.41 times less risky than Millenium Hotels. It trades about 0.05 of its potential returns per unit of risk. Millenium Hotels Real is currently generating about 0.0 per unit of risk. If you would invest 567.00 in Bankinter on October 28, 2024 and sell it today you would earn a total of 250.00 from holding Bankinter or generate 44.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.66% |
| Values | Daily Returns |
Bankinter vs. Millenium Hotels Real
Performance |
| Timeline |
| Bankinter |
| Millenium Hotels Real |
Bankinter and Millenium Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankinter and Millenium Hotels
The main advantage of trading using opposite Bankinter and Millenium Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, Millenium Hotels 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 Millenium Hotels will offset losses from the drop in Millenium Hotels' long position.The idea behind Bankinter and Millenium Hotels Real 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.| Millenium Hotels vs. Technomeca Aerospace SA | Millenium Hotels vs. Azaria Rental SOCIMI | Millenium Hotels vs. Media Investment Optimization | Millenium Hotels vs. Naturhouse Health SA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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