Correlation Between Caixabank and Atresmedia Corporacin
Can any of the company-specific risk be diversified away by investing in both Caixabank and Atresmedia Corporacin 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 Atresmedia Corporacin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Atresmedia Corporacin de, you can compare the effects of market volatilities on Caixabank and Atresmedia Corporacin 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 Atresmedia Corporacin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Atresmedia Corporacin.
Diversification Opportunities for Caixabank and Atresmedia Corporacin
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caixabank and Atresmedia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Atresmedia Corporacin de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia Corporacin 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 Atresmedia Corporacin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia Corporacin has no effect on the direction of Caixabank i.e., Caixabank and Atresmedia Corporacin go up and down completely randomly.
Pair Corralation between Caixabank and Atresmedia Corporacin
Assuming the 90 days trading horizon Caixabank SA is expected to generate 1.47 times more return on investment than Atresmedia Corporacin. However, Caixabank is 1.47 times more volatile than Atresmedia Corporacin de. It trades about 0.06 of its potential returns per unit of risk. Atresmedia Corporacin de is currently generating about 0.08 per unit of risk. If you would invest 337.00 in Caixabank SA on August 28, 2024 and sell it today you would earn a total of 173.00 from holding Caixabank SA or generate 51.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caixabank SA vs. Atresmedia Corporacin de
Performance |
| Timeline |
| Caixabank SA |
| Atresmedia Corporacin |
Caixabank and Atresmedia Corporacin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Atresmedia Corporacin
The main advantage of trading using opposite Caixabank and Atresmedia Corporacin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Atresmedia Corporacin 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 Atresmedia Corporacin will offset losses from the drop in Atresmedia Corporacin's long position.The idea behind Caixabank SA and Atresmedia Corporacin de 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.| Atresmedia Corporacin vs. Mapfre | Atresmedia Corporacin vs. ENCE Energa y | Atresmedia Corporacin vs. Acerinox | Atresmedia Corporacin vs. Enags SA |
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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