Correlation Between GOODTECH ASA and CaixaBank
Can any of the company-specific risk be diversified away by investing in both GOODTECH ASA and CaixaBank 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 GOODTECH ASA and CaixaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOODTECH ASA A and CaixaBank SA, you can compare the effects of market volatilities on GOODTECH ASA and CaixaBank 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 GOODTECH ASA with a short position of CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODTECH ASA and CaixaBank.
Diversification Opportunities for GOODTECH ASA and CaixaBank
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOODTECH and CaixaBank is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GOODTECH ASA A and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA and GOODTECH ASA 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 GOODTECH ASA A are associated (or correlated) with CaixaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaixaBank SA has no effect on the direction of GOODTECH ASA i.e., GOODTECH ASA and CaixaBank go up and down completely randomly.
Pair Corralation between GOODTECH ASA and CaixaBank
Assuming the 90 days horizon GOODTECH ASA is expected to generate 5.24 times less return on investment than CaixaBank. But when comparing it to its historical volatility, GOODTECH ASA A is 1.09 times less risky than CaixaBank. It trades about 0.05 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 526.00 in CaixaBank SA on October 16, 2024 and sell it today you would earn a total of 39.00 from holding CaixaBank SA or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOODTECH ASA A vs. CaixaBank SA
Performance |
| Timeline |
| GOODTECH ASA A |
| CaixaBank SA |
GOODTECH ASA and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODTECH ASA and CaixaBank
The main advantage of trading using opposite GOODTECH ASA and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODTECH ASA position performs unexpectedly, CaixaBank 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 will offset losses from the drop in CaixaBank's long position.| GOODTECH ASA vs. Vinci S A | GOODTECH ASA vs. Johnson Controls International | GOODTECH ASA vs. Larsen Toubro Limited | GOODTECH ASA vs. China Railway Group |
| CaixaBank vs. BNP Paribas SA | CaixaBank vs. BNP PARIBAS ADR | CaixaBank vs. Intesa Sanpaolo SpA | CaixaBank vs. Lloyds Banking Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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