Correlation Between IShares Core and Bankinter

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

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

Diversification Opportunities for IShares Core and Bankinter

0.55

Correlation Coefficient

IShares Core  Bankinter

Very weak diversification

The 3 months correlation between IShares and Bankinter is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter and IShares Core 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 iShares Core SP 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 IShares Core i.e., IShares Core and Bankinter go up and down completely randomly.

Pair Corralation between IShares Core and Bankinter

Considering the 90-day investment horizon IShares Core is expected to generate 1.03 times less return on investment than Bankinter. But when comparing it to its historical volatility, iShares Core SP is 1.26 times less risky than Bankinter. It trades about 0.19 of its potential returns per unit of risk. Bankinter is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  711.00  in Bankinter on July 7, 2024 and sell it today you would earn a total of  59.00  from holding Bankinter or generate 8.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.78%
Values	Daily Returns

iShares Core SP  vs.  Bankinter

iShares Core SP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward-looking indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Bankinter

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bankinter are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 IShares Core and Bankinter

The main advantage of trading using opposite IShares Core and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 iShares Core SP 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 Transaction History module to view history of all your transactions and understand their impact on performance.