Correlation Between Merlin Properties and Bankinter
Can any of the company-specific risk be diversified away by investing in both Merlin Properties 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 Merlin Properties and Bankinter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merlin Properties SOCIMI and Bankinter, you can compare the effects of market volatilities on Merlin Properties 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 Merlin Properties with a short position of Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merlin Properties and Bankinter.
Diversification Opportunities for Merlin Properties and Bankinter
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merlin and Bankinter is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Merlin Properties SOCIMI and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter and Merlin Properties 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 Merlin Properties SOCIMI 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 has no effect on the direction of Merlin Properties i.e., Merlin Properties and Bankinter go up and down completely randomly.
Pair Corralation between Merlin Properties and Bankinter
Assuming the 90 days trading horizon Merlin Properties SOCIMI is expected to generate 1.01 times more return on investment than Bankinter. However, Merlin Properties is 1.01 times more volatile than Bankinter. It trades about 0.19 of its potential returns per unit of risk. Bankinter is currently generating about 0.12 per unit of risk. If you would invest 960.00 in Merlin Properties SOCIMI on September 15, 2024 and sell it today you would earn a total of 64.00 from holding Merlin Properties SOCIMI or generate 6.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Merlin Properties SOCIMI vs. Bankinter
Performance |
Timeline |
Merlin Properties SOCIMI |
Bankinter |
Merlin Properties and Bankinter Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merlin Properties and Bankinter
The main advantage of trading using opposite Merlin Properties and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merlin Properties 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.Merlin Properties vs. Cellnex Telecom SA | Merlin Properties vs. Caixabank SA | Merlin Properties vs. Tier1 Technology SA | Merlin Properties vs. Ebro Foods |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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