Correlation Between Bankinter and Castellana Properties

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

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

Diversification Opportunities for Bankinter and Castellana Properties

0.32

Correlation Coefficient

Bankinter  Castellana Properties

Weak diversification

The 3 months correlation between Bankinter and Castellana is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and Castellana Properties Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellana Properties 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 Castellana Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellana Properties has no effect on the direction of Bankinter i.e., Bankinter and Castellana Properties go up and down completely randomly.

Pair Corralation between Bankinter and Castellana Properties

If you would invest  760.00  in Bankinter on December 4, 2024 and sell it today you would earn a total of  175.00  from holding Bankinter or generate 23.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Bankinter  vs.  Castellana Properties Socimi

Bankinter

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bankinter are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bankinter exhibited solid returns over the last few months and may actually be approaching a breakup point.

Castellana Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castellana Properties Socimi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Castellana Properties 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 Castellana Properties

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

The idea behind Bankinter and Castellana Properties Socimi 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.