Correlation Between National Bank and Bankinter
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and Bankinter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Bankinter SA ADR, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Bankinter.
Diversification Opportunities for National Bank and Bankinter
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Bankinter is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Bankinter SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter SA ADR and National Bank 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 National Bank of 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 ADR has no effect on the direction of National Bank i.e., National Bank and Bankinter go up and down completely randomly.
Pair Corralation between National Bank and Bankinter
Assuming the 90 days horizon National Bank of is expected to generate 1.5 times more return on investment than Bankinter. However, National Bank is 1.5 times more volatile than Bankinter SA ADR. It trades about 0.04 of its potential returns per unit of risk. Bankinter SA ADR is currently generating about 0.04 per unit of risk. If you would invest 600.00 in National Bank of on October 24, 2024 and sell it today you would earn a total of 255.00 from holding National Bank of or generate 42.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.36% |
| Values | Daily Returns |
National Bank of vs. Bankinter SA ADR
Performance |
| Timeline |
| National Bank |
| Bankinter SA ADR |
National Bank and Bankinter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Bankinter
The main advantage of trading using opposite National Bank and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. Century Next Financial | National Bank vs. Triad Business Bank | National Bank vs. First Ottawa Bancshares | National Bank vs. First Community Financial |
| Bankinter vs. Bank Hapoalim ADR | Bankinter vs. Bank of East | Bankinter vs. BOC Hong Kong | Bankinter vs. Commercial International Bank |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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