Correlation Between Bankinter and Airbus Group

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

By analyzing existing cross correlation between Bankinter and Airbus Group SE, you can compare the effects of market volatilities on Bankinter and Airbus Group 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 Bankinter with a short position of Airbus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and Airbus Group.

Diversification Opportunities for Bankinter and Airbus Group

-0.3

Correlation Coefficient

Bankinter  Airbus Group

Very good diversification

The 3 months correlation between Bankinter and Airbus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and Airbus Group SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus Group SE and Bankinter 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 Bankinter are associated (or correlated) with Airbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus Group SE has no effect on the direction of Bankinter i.e., Bankinter and Airbus Group go up and down completely randomly.

Pair Corralation between Bankinter and Airbus Group

Assuming the 90 days trading horizon Bankinter is expected to under-perform the Airbus Group. In addition to that, Bankinter is 1.0 times more volatile than Airbus Group SE. It trades about -0.01 of its total potential returns per unit of risk. Airbus Group SE is currently generating about 0.15 per unit of volatility. If you would invest  13,226  in Airbus Group SE on September 5, 2024 and sell it today you would earn a total of  1,944  from holding Airbus Group SE or generate 14.7% return on investment over 90 days.

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

Bankinter  vs.  Airbus Group SE

Bankinter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bankinter has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bankinter is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Airbus Group SE

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus Group SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Airbus Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bankinter and Airbus Group

The main advantage of trading using opposite Bankinter and Airbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankinter position performs unexpectedly, Airbus Group 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 Airbus Group will offset losses from the drop in Airbus Group's long position.

The idea behind Bankinter and Airbus Group SE 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.