Correlation Between Maschinenfabrik Berthold and BANKINTER ADR

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

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

Diversification Opportunities for Maschinenfabrik Berthold and BANKINTER ADR

-0.42

Correlation Coefficient

Maschinenfabrik Berthold  BANKINTER ADR

Very good diversification

The 3 months correlation between Maschinenfabrik and BANKINTER is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Maschinenfabrik Berthold Herml 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 Maschinenfabrik Berthold 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 Maschinenfabrik Berthold Hermle 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 Maschinenfabrik Berthold i.e., Maschinenfabrik Berthold and BANKINTER ADR go up and down completely randomly.

Pair Corralation between Maschinenfabrik Berthold and BANKINTER ADR

Assuming the 90 days trading horizon Maschinenfabrik Berthold Hermle is expected to under-perform the BANKINTER ADR. In addition to that, Maschinenfabrik Berthold is 1.0 times more volatile than BANKINTER ADR 2007. It trades about -0.1 of its total potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.02 per unit of volatility. If you would invest  713.00  in BANKINTER ADR 2007 on September 15, 2024 and sell it today you would earn a total of  12.00  from holding BANKINTER ADR 2007 or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

Maschinenfabrik Berthold Herml  vs.  BANKINTER ADR 2007

Maschinenfabrik Berthold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maschinenfabrik Berthold Hermle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BANKINTER ADR 2007

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 1 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Maschinenfabrik Berthold and BANKINTER ADR

The main advantage of trading using opposite Maschinenfabrik Berthold and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maschinenfabrik Berthold 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 Maschinenfabrik Berthold Hermle 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.