Correlation Between CIFI Holdings and BANKINTER ADR

Can any of the company-specific risk be diversified away by investing in both CIFI Holdings 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 CIFI Holdings and BANKINTER ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CIFI Holdings Co and BANKINTER ADR 2007, you can compare the effects of market volatilities on CIFI Holdings 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 CIFI Holdings with a short position of BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIFI Holdings and BANKINTER ADR.

Diversification Opportunities for CIFI Holdings and BANKINTER ADR

-0.4

Correlation Coefficient

CIFI Holdings  BANKINTER ADR

Very good diversification

The 3 months correlation between CIFI and BANKINTER is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CIFI Holdings Co 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 CIFI Holdings 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 CIFI Holdings Co 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 CIFI Holdings i.e., CIFI Holdings and BANKINTER ADR go up and down completely randomly.

Pair Corralation between CIFI Holdings and BANKINTER ADR

Assuming the 90 days horizon CIFI Holdings Co is expected to generate 6.34 times more return on investment than BANKINTER ADR. However, CIFI Holdings is 6.34 times more volatile than BANKINTER ADR 2007. It trades about 0.11 of its potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.03 per unit of risk. If you would invest  1.85  in CIFI Holdings Co on September 23, 2024 and sell it today you would earn a total of  1.00  from holding CIFI Holdings Co or generate 54.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CIFI Holdings Co  vs.  BANKINTER ADR 2007

CIFI Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIFI Holdings Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CIFI Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

BANKINTER ADR 2007

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BANKINTER ADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CIFI Holdings and BANKINTER ADR

The main advantage of trading using opposite CIFI Holdings and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIFI Holdings 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.

The idea behind CIFI Holdings Co and BANKINTER ADR 2007 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.