Correlation Between Bankinter and Unicaja Banco

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

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

Diversification Opportunities for Bankinter and Unicaja Banco

0.6

Correlation Coefficient

Bankinter  Unicaja Banco

Poor diversification

The 3 months correlation between Bankinter and Unicaja is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and Unicaja Banco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicaja Banco 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 Unicaja Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicaja Banco SA has no effect on the direction of Bankinter i.e., Bankinter and Unicaja Banco go up and down completely randomly.

Pair Corralation between Bankinter and Unicaja Banco

Assuming the 90 days trading horizon Bankinter is expected to under-perform the Unicaja Banco. But the stock apears to be less risky and, when comparing its historical volatility, Bankinter is 1.21 times less risky than Unicaja Banco. The stock trades about -0.01 of its potential returns per unit of risk. The Unicaja Banco SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  115.00  in Unicaja Banco SA on September 14, 2024 and sell it today you would earn a total of  15.00  from holding Unicaja Banco SA or generate 13.04% return on investment over 90 days.

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

Bankinter  vs.  Unicaja Banco 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.

Unicaja Banco SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unicaja Banco SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, Unicaja Banco exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bankinter and Unicaja Banco

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

The idea behind Bankinter and Unicaja Banco 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..