Correlation Between Cia De and Bankinter

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

By analyzing existing cross correlation between Cia de Distribucion and Bankinter, you can compare the effects of market volatilities on Cia De and Bankinter 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 Cia De with a short position of Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cia De and Bankinter.

Diversification Opportunities for Cia De and Bankinter

-0.65

Correlation Coefficient

Cia De  Bankinter

Excellent diversification

The 3 months correlation between Cia and Bankinter is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cia de Distribucion and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter and Cia De 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 Cia de Distribucion are associated (or correlated) with Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter has no effect on the direction of Cia De i.e., Cia De and Bankinter go up and down completely randomly.

Pair Corralation between Cia De and Bankinter

Assuming the 90 days trading horizon Cia de Distribucion is expected to under-perform the Bankinter. In addition to that, Cia De is 1.02 times more volatile than Bankinter. It trades about -0.1 of its total potential returns per unit of risk. Bankinter is currently generating about 0.19 per unit of volatility. If you would invest  1,003  in Bankinter on April 24, 2025 and sell it today you would earn a total of  157.00  from holding Bankinter or generate 15.65% return on investment over 90 days.

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

Cia de Distribucion  vs.  Bankinter

Cia de Distribucion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cia de Distribucion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Bankinter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bankinter are ranked lower than 15 (%) 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.

Pair Trading with Cia De and Bankinter

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

The idea behind Cia de Distribucion and Bankinter 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.