Correlation Between Caixabank and Bankinter
Can any of the company-specific risk be diversified away by investing in both Caixabank and Bankinter 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 Caixabank and Bankinter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Bankinter, you can compare the effects of market volatilities on Caixabank and Bankinter 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 Caixabank with a short position of Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Bankinter.
Diversification Opportunities for Caixabank and Bankinter
Good diversification
The 3 months correlation between Caixabank and Bankinter is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter and Caixabank 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 Caixabank SA are associated (or correlated) with Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter has no effect on the direction of Caixabank i.e., Caixabank and Bankinter go up and down completely randomly.
Pair Corralation between Caixabank and Bankinter
Assuming the 90 days trading horizon Caixabank SA is expected to under-perform the Bankinter. In addition to that, Caixabank is 1.2 times more volatile than Bankinter. It trades about -0.08 of its total potential returns per unit of risk. Bankinter is currently generating about 0.1 per unit of volatility. If you would invest 738.00 in Bankinter on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Bankinter or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caixabank SA vs. Bankinter
Performance |
| Timeline |
| Caixabank SA |
| Bankinter |
Caixabank and Bankinter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Bankinter
The main advantage of trading using opposite Caixabank and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Bankinter 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 Bankinter will offset losses from the drop in Bankinter's long position.| Caixabank vs. Banco de Sabadell | Caixabank vs. Banco Santander | Caixabank vs. Bankinter | Caixabank vs. Repsol |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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