Correlation Between Caixabank and Gigas Hosting
Can any of the company-specific risk be diversified away by investing in both Caixabank and Gigas Hosting 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 Gigas Hosting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Gigas Hosting SA, you can compare the effects of market volatilities on Caixabank and Gigas Hosting 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 Gigas Hosting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Gigas Hosting.
Diversification Opportunities for Caixabank and Gigas Hosting
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caixabank and Gigas is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Gigas Hosting SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigas Hosting SA 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 Gigas Hosting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigas Hosting SA has no effect on the direction of Caixabank i.e., Caixabank and Gigas Hosting go up and down completely randomly.
Pair Corralation between Caixabank and Gigas Hosting
Assuming the 90 days trading horizon Caixabank SA is expected to generate 0.83 times more return on investment than Gigas Hosting. However, Caixabank SA is 1.2 times less risky than Gigas Hosting. It trades about 0.09 of its potential returns per unit of risk. Gigas Hosting SA is currently generating about 0.0 per unit of risk. If you would invest 347.00 in Caixabank SA on September 12, 2024 and sell it today you would earn a total of 186.00 from holding Caixabank SA or generate 53.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caixabank SA vs. Gigas Hosting SA
Performance |
| Timeline |
| Caixabank SA |
| Gigas Hosting SA |
Caixabank and Gigas Hosting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Gigas Hosting
The main advantage of trading using opposite Caixabank and Gigas Hosting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Gigas Hosting 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 Gigas Hosting will offset losses from the drop in Gigas Hosting's long position.The idea behind Caixabank SA and Gigas Hosting SA 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.| Gigas Hosting vs. Elaia Investment Spain | Gigas Hosting vs. Labiana Health SA | Gigas Hosting vs. Inhome Prime Properties | Gigas Hosting vs. Caixabank 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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