Correlation Between Elaia Investment and Bankinter

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

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

Diversification Opportunities for Elaia Investment and Bankinter

-0.1

Correlation Coefficient

Elaia Investment  Bankinter

Good diversification

The 3 months correlation between Elaia and Bankinter is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Elaia Investment Spain and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter and Elaia Investment 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 Elaia Investment Spain 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 Elaia Investment i.e., Elaia Investment and Bankinter go up and down completely randomly.

Pair Corralation between Elaia Investment and Bankinter

Assuming the 90 days trading horizon Elaia Investment Spain is expected to under-perform the Bankinter. In addition to that, Elaia Investment is 1.85 times more volatile than Bankinter. It trades about -0.13 of its total potential returns per unit of risk. Bankinter is currently generating about 0.0 per unit of volatility. If you would invest  765.00  in Bankinter on September 13, 2024 and sell it today you would lose (9.00) from holding Bankinter or give up 1.18% of portfolio value over 90 days.

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

Elaia Investment Spain  vs.  Bankinter

Elaia Investment Spain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elaia Investment Spain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with Elaia Investment and Bankinter

The main advantage of trading using opposite Elaia Investment and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elaia Investment 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.

The idea behind Elaia Investment Spain and Bankinter 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.