Correlation Between China Communications and BANKINTER ADR
Can any of the company-specific risk be diversified away by investing in both China Communications and BANKINTER ADR 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 China Communications and BANKINTER ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Communications Services and BANKINTER ADR 2007, you can compare the effects of market volatilities on China Communications and BANKINTER ADR 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 China Communications with a short position of BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Communications and BANKINTER ADR.
Diversification Opportunities for China Communications and BANKINTER ADR
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and BANKINTER is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding China Communications Services and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 and China Communications 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 China Communications Services are associated (or correlated) with BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of China Communications i.e., China Communications and BANKINTER ADR go up and down completely randomly.
Pair Corralation between China Communications and BANKINTER ADR
Assuming the 90 days horizon China Communications Services is expected to under-perform the BANKINTER ADR. But the stock apears to be less risky and, when comparing its historical volatility, China Communications Services is 1.32 times less risky than BANKINTER ADR. The stock trades about -0.06 of its potential returns per unit of risk. The BANKINTER ADR 2007 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 710.00 in BANKINTER ADR 2007 on August 30, 2024 and sell it today you would earn a total of 20.00 from holding BANKINTER ADR 2007 or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Communications Services vs. BANKINTER ADR 2007
Performance |
| Timeline |
| China Communications |
| BANKINTER ADR 2007 |
China Communications and BANKINTER ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Communications and BANKINTER ADR
The main advantage of trading using opposite China Communications and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Communications position performs unexpectedly, BANKINTER ADR 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 ADR will offset losses from the drop in BANKINTER ADR's long position.| China Communications vs. AVITA Medical | China Communications vs. TRADEGATE | China Communications vs. Merit Medical Systems | China Communications vs. SAFETY MEDICAL PROD |
| BANKINTER ADR vs. China Communications Services | BANKINTER ADR vs. Iridium Communications | BANKINTER ADR vs. Neinor Homes SA | BANKINTER ADR vs. Corporate Office Properties |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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