Correlation Between BANKINTER ADR and CEOTRONICS

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

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

Diversification Opportunities for BANKINTER ADR and CEOTRONICS

0.52

Correlation Coefficient

BANKINTER ADR  CEOTRONICS

Very weak diversification

The 3 months correlation between BANKINTER and CEOTRONICS is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS and BANKINTER ADR 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 ADR 2007 are associated (or correlated) with CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of BANKINTER ADR i.e., BANKINTER ADR and CEOTRONICS go up and down completely randomly.

Pair Corralation between BANKINTER ADR and CEOTRONICS

Assuming the 90 days horizon BANKINTER ADR is expected to generate 1.14 times less return on investment than CEOTRONICS. But when comparing it to its historical volatility, BANKINTER ADR 2007 is 1.23 times less risky than CEOTRONICS. It trades about 0.04 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  428.00  in CEOTRONICS on October 4, 2024 and sell it today you would earn a total of  147.00  from holding CEOTRONICS or generate 34.35% return on investment over 90 days.

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

BANKINTER ADR 2007  vs.  CEOTRONICS

BANKINTER ADR 2007

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BANKINTER ADR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CEOTRONICS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CEOTRONICS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BANKINTER ADR and CEOTRONICS

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

The idea behind BANKINTER ADR 2007 and CEOTRONICS 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.