Correlation Between Bankinter and Uwharrie Capital

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

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

Diversification Opportunities for Bankinter and Uwharrie Capital

-0.45

Correlation Coefficient

Bankinter  Uwharrie Capital

Very good diversification

The 3 months correlation between Bankinter and Uwharrie is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter SA ADR and Uwharrie Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwharrie Capital Corp and Bankinter 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 SA ADR are associated (or correlated) with Uwharrie Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwharrie Capital Corp has no effect on the direction of Bankinter i.e., Bankinter and Uwharrie Capital go up and down completely randomly.

Pair Corralation between Bankinter and Uwharrie Capital

Assuming the 90 days horizon Bankinter is expected to generate 2.45 times less return on investment than Uwharrie Capital. In addition to that, Bankinter is 1.44 times more volatile than Uwharrie Capital Corp. It trades about 0.01 of its total potential returns per unit of risk. Uwharrie Capital Corp is currently generating about 0.03 per unit of volatility. If you would invest  792.00  in Uwharrie Capital Corp on October 23, 2024 and sell it today you would earn a total of  18.00  from holding Uwharrie Capital Corp or generate 2.27% return on investment over 90 days.

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

Bankinter SA ADR  vs.  Uwharrie Capital Corp

Bankinter SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bankinter SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Bankinter is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Uwharrie Capital Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Uwharrie Capital Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Uwharrie Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bankinter and Uwharrie Capital

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

The idea behind Bankinter SA ADR and Uwharrie Capital Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.