Correlation Between EOG Resources and BANKINTER ADR

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

By analyzing existing cross correlation between EOG Resources and BANKINTER ADR 2007, you can compare the effects of market volatilities on EOG Resources and BANKINTER ADR 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 EOG Resources with a short position of BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and BANKINTER ADR.

Diversification Opportunities for EOG Resources and BANKINTER ADR

0.29

Correlation Coefficient

EOG Resources  BANKINTER ADR

Modest diversification

The 3 months correlation between EOG and BANKINTER is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 and EOG Resources 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 EOG Resources are associated (or correlated) with BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of EOG Resources i.e., EOG Resources and BANKINTER ADR go up and down completely randomly.

Pair Corralation between EOG Resources and BANKINTER ADR

Assuming the 90 days horizon EOG Resources is expected to generate 1.32 times more return on investment than BANKINTER ADR. However, EOG Resources is 1.32 times more volatile than BANKINTER ADR 2007. It trades about 0.12 of its potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.04 per unit of risk. If you would invest  12,158  in EOG Resources on October 12, 2024 and sell it today you would earn a total of  412.00  from holding EOG Resources or generate 3.39% return on investment over 90 days.

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

EOG Resources  vs.  BANKINTER ADR 2007

EOG Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EOG Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, EOG Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BANKINTER ADR 2007

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BANKINTER ADR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with EOG Resources and BANKINTER ADR

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

The idea behind EOG Resources and BANKINTER ADR 2007 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.