Correlation Between DAIRY FARM and Bankinter
Can any of the company-specific risk be diversified away by investing in both DAIRY FARM 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 DAIRY FARM and Bankinter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIRY FARM INTL and Bankinter SA, you can compare the effects of market volatilities on DAIRY FARM 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 DAIRY FARM with a short position of Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIRY FARM and Bankinter.
Diversification Opportunities for DAIRY FARM and Bankinter
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAIRY and Bankinter is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding DAIRY FARM INTL and Bankinter SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter SA and DAIRY FARM 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 DAIRY FARM INTL 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 SA has no effect on the direction of DAIRY FARM i.e., DAIRY FARM and Bankinter go up and down completely randomly.
Pair Corralation between DAIRY FARM and Bankinter
Assuming the 90 days trading horizon DAIRY FARM INTL is expected to generate 0.81 times more return on investment than Bankinter. However, DAIRY FARM INTL is 1.23 times less risky than Bankinter. It trades about 0.26 of its potential returns per unit of risk. Bankinter SA is currently generating about 0.09 per unit of risk. If you would invest 216.00 in DAIRY FARM INTL on September 2, 2024 and sell it today you would earn a total of 18.00 from holding DAIRY FARM INTL or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAIRY FARM INTL vs. Bankinter SA
Performance |
| Timeline |
| DAIRY FARM INTL |
| Bankinter SA |
DAIRY FARM and Bankinter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIRY FARM and Bankinter
The main advantage of trading using opposite DAIRY FARM and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIRY FARM 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.| DAIRY FARM vs. SIVERS SEMICONDUCTORS AB | DAIRY FARM vs. Darden Restaurants | DAIRY FARM vs. Reliance Steel Aluminum | DAIRY FARM vs. Q2M Managementberatung AG |
| Bankinter vs. SIVERS SEMICONDUCTORS AB | Bankinter vs. Darden Restaurants | Bankinter vs. Reliance Steel Aluminum | Bankinter vs. Q2M Managementberatung AG |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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