Correlation Between Bankinter and Iffe Futura

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

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

Diversification Opportunities for Bankinter and Iffe Futura

0.72

Correlation Coefficient

Bankinter  Iffe Futura

Poor diversification

The 3 months correlation between Bankinter and Iffe is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bankinter and Iffe Futura SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iffe Futura 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 Iffe Futura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iffe Futura SA has no effect on the direction of Bankinter i.e., Bankinter and Iffe Futura go up and down completely randomly.

Pair Corralation between Bankinter and Iffe Futura

Assuming the 90 days trading horizon Bankinter is expected to generate 0.75 times more return on investment than Iffe Futura. However, Bankinter is 1.34 times less risky than Iffe Futura. It trades about 0.19 of its potential returns per unit of risk. Iffe Futura SA is currently generating about 0.14 per unit of risk. If you would invest  986.00  in Bankinter on April 23, 2025 and sell it today you would earn a total of  150.00  from holding Bankinter or generate 15.21% return on investment over 90 days.

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

Bankinter  vs.  Iffe Futura SA

Bankinter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bankinter are ranked lower than 14 (%) 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.

Iffe Futura SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Iffe Futura SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Iffe Futura exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bankinter and Iffe Futura

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

The idea behind Bankinter and Iffe Futura 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.