Correlation Between GMP Property and Bankinter

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

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

Diversification Opportunities for GMP Property and Bankinter

-0.77

Correlation Coefficient

GMP Property  Bankinter

Pay attention - limited upside

The 3 months correlation between GMP and Bankinter is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding GMP Property SOCIMI and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter and GMP Property 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 GMP Property SOCIMI 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 GMP Property i.e., GMP Property and Bankinter go up and down completely randomly.

Pair Corralation between GMP Property and Bankinter

If you would invest  738.00  in Bankinter on August 29, 2024 and sell it today you would earn a total of  23.00  from holding Bankinter or generate 3.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

GMP Property SOCIMI  vs.  Bankinter

GMP Property SOCIMI

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GMP Property SOCIMI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, GMP Property exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with GMP Property and Bankinter

The main advantage of trading using opposite GMP Property and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMP Property 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 GMP Property SOCIMI 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 Transaction History module to view history of all your transactions and understand their impact on performance.