Correlation Between Caixabank and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Caixabank and Naturhouse Health 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 Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Naturhouse Health SA, you can compare the effects of market volatilities on Caixabank and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Naturhouse Health.
Diversification Opportunities for Caixabank and Naturhouse Health
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caixabank and Naturhouse is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Caixabank i.e., Caixabank and Naturhouse Health go up and down completely randomly.
Pair Corralation between Caixabank and Naturhouse Health
Assuming the 90 days trading horizon Caixabank SA is expected to generate 1.0 times more return on investment than Naturhouse Health. However, Caixabank is 1.0 times more volatile than Naturhouse Health SA. It trades about 0.12 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.01 per unit of risk. If you would invest 467.00 in Caixabank SA on November 4, 2024 and sell it today you would earn a total of 119.00 from holding Caixabank SA or generate 25.48% 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. Naturhouse Health SA
Performance |
| Timeline |
| Caixabank SA |
| Naturhouse Health |
Caixabank and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Naturhouse Health
The main advantage of trading using opposite Caixabank and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Caixabank vs. Banco de Sabadell | Caixabank vs. Banco Santander | Caixabank vs. Bankinter | Caixabank vs. Repsol |
| Naturhouse Health vs. Caixabank SA | Naturhouse Health vs. Technomeca Aerospace SA | Naturhouse Health vs. Techo Hogar SOCIMI, | Naturhouse Health vs. Millenium Hotels 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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