Correlation Between Bankinter and Grupo Ecoener

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

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

Diversification Opportunities for Bankinter and Grupo Ecoener

-0.46

Correlation Coefficient

Bankinter  Grupo Ecoener

Very good diversification

The 3 months correlation between Bankinter and Grupo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and Grupo Ecoener SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Ecoener SA 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 Grupo Ecoener. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Ecoener SA has no effect on the direction of Bankinter i.e., Bankinter and Grupo Ecoener go up and down completely randomly.

Pair Corralation between Bankinter and Grupo Ecoener

Assuming the 90 days trading horizon Bankinter is expected to under-perform the Grupo Ecoener. But the stock apears to be less risky and, when comparing its historical volatility, Bankinter is 1.08 times less risky than Grupo Ecoener. The stock trades about -0.01 of its potential returns per unit of risk. The Grupo Ecoener SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  374.00  in Grupo Ecoener SA on September 12, 2024 and sell it today you would earn a total of  63.00  from holding Grupo Ecoener SA or generate 16.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Bankinter  vs.  Grupo Ecoener SA

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.

Grupo Ecoener SA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Ecoener SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Grupo Ecoener exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bankinter and Grupo Ecoener

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

The idea behind Bankinter and Grupo Ecoener SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.