Correlation Between CaixaBank and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both CaixaBank and Westinghouse Air 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 CaixaBank and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CaixaBank SA and Westinghouse Air Brake, you can compare the effects of market volatilities on CaixaBank and Westinghouse Air 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 CaixaBank with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CaixaBank and Westinghouse Air.
Diversification Opportunities for CaixaBank and Westinghouse Air
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CaixaBank and Westinghouse is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CaixaBank SA and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake and CaixaBank 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 CaixaBank SA are associated (or correlated) with Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of CaixaBank i.e., CaixaBank and Westinghouse Air go up and down completely randomly.
Pair Corralation between CaixaBank and Westinghouse Air
Assuming the 90 days trading horizon CaixaBank SA is expected to generate 1.85 times more return on investment than Westinghouse Air. However, CaixaBank is 1.85 times more volatile than Westinghouse Air Brake. It trades about 0.31 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.25 per unit of risk. If you would invest 514.00 in CaixaBank SA on November 7, 2024 and sell it today you would earn a total of 81.00 from holding CaixaBank SA or generate 15.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CaixaBank SA vs. Westinghouse Air Brake
Performance |
| Timeline |
| CaixaBank SA |
| Westinghouse Air Brake |
CaixaBank and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CaixaBank and Westinghouse Air
The main advantage of trading using opposite CaixaBank and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CaixaBank position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| CaixaBank vs. BNP Paribas SA | CaixaBank vs. BNP PARIBAS ADR | CaixaBank vs. Intesa Sanpaolo SpA | CaixaBank vs. Lloyds Banking Group |
| Westinghouse Air vs. CyberArk Software | Westinghouse Air vs. Magic Software Enterprises | Westinghouse Air vs. Alfa Financial Software | Westinghouse Air vs. CHIBA BANK |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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