Correlation Between ABERFORTH SMCOS and CAIXABANK UNADR
Can any of the company-specific risk be diversified away by investing in both ABERFORTH SMCOS and CAIXABANK UNADR 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 ABERFORTH SMCOS and CAIXABANK UNADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABERFORTH SMCOS TRLS 01 and CAIXABANK UNADR 13, you can compare the effects of market volatilities on ABERFORTH SMCOS and CAIXABANK UNADR 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 ABERFORTH SMCOS with a short position of CAIXABANK UNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABERFORTH SMCOS and CAIXABANK UNADR.
Diversification Opportunities for ABERFORTH SMCOS and CAIXABANK UNADR
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABERFORTH and CAIXABANK is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ABERFORTH SMCOS TRLS 01 and CAIXABANK UNADR 13 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIXABANK UNADR 13 and ABERFORTH SMCOS 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 ABERFORTH SMCOS TRLS 01 are associated (or correlated) with CAIXABANK UNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIXABANK UNADR 13 has no effect on the direction of ABERFORTH SMCOS i.e., ABERFORTH SMCOS and CAIXABANK UNADR go up and down completely randomly.
Pair Corralation between ABERFORTH SMCOS and CAIXABANK UNADR
Assuming the 90 days horizon ABERFORTH SMCOS TRLS 01 is expected to under-perform the CAIXABANK UNADR. But the stock apears to be less risky and, when comparing its historical volatility, ABERFORTH SMCOS TRLS 01 is 1.92 times less risky than CAIXABANK UNADR. The stock trades about -0.23 of its potential returns per unit of risk. The CAIXABANK UNADR 13 is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 161.00 in CAIXABANK UNADR 13 on August 29, 2024 and sell it today you would lose (6.00) from holding CAIXABANK UNADR 13 or give up 3.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABERFORTH SMCOS TRLS 01 vs. CAIXABANK UNADR 13
Performance |
| Timeline |
| ABERFORTH SMCOS TRLS |
| CAIXABANK UNADR 13 |
ABERFORTH SMCOS and CAIXABANK UNADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABERFORTH SMCOS and CAIXABANK UNADR
The main advantage of trading using opposite ABERFORTH SMCOS and CAIXABANK UNADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABERFORTH SMCOS position performs unexpectedly, CAIXABANK UNADR 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 CAIXABANK UNADR will offset losses from the drop in CAIXABANK UNADR's long position.| ABERFORTH SMCOS vs. GREENX METALS LTD | ABERFORTH SMCOS vs. Microbot Medical | ABERFORTH SMCOS vs. Apyx Medical Corp | ABERFORTH SMCOS vs. IMPERIAL TOBACCO |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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