Correlation Between Bankinter and ENCE Energa

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

By analyzing existing cross correlation between Bankinter and ENCE Energa y, you can compare the effects of market volatilities on Bankinter and ENCE Energa 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 ENCE Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankinter and ENCE Energa.

Diversification Opportunities for Bankinter and ENCE Energa

0.11

Correlation Coefficient

Bankinter  ENCE Energa

Average diversification

The 3 months correlation between Bankinter and ENCE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and ENCE Energa y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENCE Energa y 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 are associated (or correlated) with ENCE Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENCE Energa y has no effect on the direction of Bankinter i.e., Bankinter and ENCE Energa go up and down completely randomly.

Pair Corralation between Bankinter and ENCE Energa

Assuming the 90 days trading horizon Bankinter is expected to under-perform the ENCE Energa. In addition to that, Bankinter is 1.09 times more volatile than ENCE Energa y. It trades about -0.01 of its total potential returns per unit of risk. ENCE Energa y is currently generating about 0.02 per unit of volatility. If you would invest  290.00  in ENCE Energa y on September 14, 2024 and sell it today you would earn a total of  4.00  from holding ENCE Energa y or generate 1.38% return on investment over 90 days.

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

Bankinter  vs.  ENCE Energa y

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.

ENCE Energa y

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENCE Energa y are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, ENCE Energa is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bankinter and ENCE Energa

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

The idea behind Bankinter and ENCE Energa y 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.