Correlation Between Caixabank and Cox ABG
Can any of the company-specific risk be diversified away by investing in both Caixabank and Cox ABG 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 Cox ABG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Cox ABG Group, you can compare the effects of market volatilities on Caixabank and Cox ABG 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 Cox ABG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Cox ABG.
Diversification Opportunities for Caixabank and Cox ABG
Excellent diversification
The 3 months correlation between Caixabank and Cox is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Cox ABG Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cox ABG Group 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 Cox ABG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cox ABG Group has no effect on the direction of Caixabank i.e., Caixabank and Cox ABG go up and down completely randomly.
Pair Corralation between Caixabank and Cox ABG
Assuming the 90 days trading horizon Caixabank SA is expected to generate 0.74 times more return on investment than Cox ABG. However, Caixabank SA is 1.36 times less risky than Cox ABG. It trades about 0.07 of its potential returns per unit of risk. Cox ABG Group is currently generating about -0.03 per unit of risk. If you would invest 347.00 in Caixabank SA on November 5, 2024 and sell it today you would earn a total of 239.00 from holding Caixabank SA or generate 68.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 10.74% |
| Values | Daily Returns |
Caixabank SA vs. Cox ABG Group
Performance |
| Timeline |
| Caixabank SA |
| Cox ABG Group |
Caixabank and Cox ABG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Cox ABG
The main advantage of trading using opposite Caixabank and Cox ABG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Cox ABG 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 Cox ABG will offset losses from the drop in Cox ABG's long position.| Caixabank vs. Banco de Sabadell | Caixabank vs. Banco Santander | Caixabank vs. Bankinter | Caixabank vs. Repsol |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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