Correlation Between Caixabank and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both Caixabank and Neinor Homes 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 Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Neinor Homes SLU, you can compare the effects of market volatilities on Caixabank and Neinor Homes 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 Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Neinor Homes.
Diversification Opportunities for Caixabank and Neinor Homes
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Caixabank and Neinor is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Neinor Homes SLU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SLU 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 Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SLU has no effect on the direction of Caixabank i.e., Caixabank and Neinor Homes go up and down completely randomly.
Pair Corralation between Caixabank and Neinor Homes
Assuming the 90 days trading horizon Caixabank SA is expected to generate 0.58 times more return on investment than Neinor Homes. However, Caixabank SA is 1.72 times less risky than Neinor Homes. It trades about 0.36 of its potential returns per unit of risk. Neinor Homes SLU is currently generating about 0.1 per unit of risk. If you would invest 517.00 in Caixabank SA on October 26, 2024 and sell it today you would earn a total of 57.00 from holding Caixabank SA or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Caixabank SA vs. Neinor Homes SLU
Performance |
| Timeline |
| Caixabank SA |
| Neinor Homes SLU |
Caixabank and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Neinor Homes
The main advantage of trading using opposite Caixabank and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| Caixabank vs. Banco de Sabadell | Caixabank vs. Banco Santander | Caixabank vs. Bankinter | Caixabank vs. Repsol |
| Neinor Homes vs. Aedas Homes SL | Neinor Homes vs. Metrovacesa SA | Neinor Homes vs. Merlin Properties SOCIMI | Neinor Homes vs. Lar Espana Real |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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