Correlation Between Caixabank and Unicaja Banco
Can any of the company-specific risk be diversified away by investing in both Caixabank and Unicaja Banco 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 Unicaja Banco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Unicaja Banco SA, you can compare the effects of market volatilities on Caixabank and Unicaja Banco 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 Unicaja Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Unicaja Banco.
Diversification Opportunities for Caixabank and Unicaja Banco
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caixabank and Unicaja is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Unicaja Banco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicaja Banco 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 Unicaja Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicaja Banco SA has no effect on the direction of Caixabank i.e., Caixabank and Unicaja Banco go up and down completely randomly.
Pair Corralation between Caixabank and Unicaja Banco
Assuming the 90 days trading horizon Caixabank SA is expected to generate 1.03 times more return on investment than Unicaja Banco. However, Caixabank is 1.03 times more volatile than Unicaja Banco SA. It trades about 0.01 of its potential returns per unit of risk. Unicaja Banco SA is currently generating about -0.03 per unit of risk. If you would invest 519.00 in Caixabank SA on August 31, 2024 and sell it today you would lose (4.00) from holding Caixabank SA or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caixabank SA vs. Unicaja Banco SA
Performance |
| Timeline |
| Caixabank SA |
| Unicaja Banco SA |
Caixabank and Unicaja Banco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Unicaja Banco
The main advantage of trading using opposite Caixabank and Unicaja Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Unicaja Banco 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 Unicaja Banco will offset losses from the drop in Unicaja Banco's long position.| Caixabank vs. Banco de Sabadell | Caixabank vs. Banco Santander | Caixabank vs. Bankinter | Caixabank vs. Repsol |
| Unicaja Banco vs. Bankinter | Unicaja Banco vs. Banco de Sabadell | Unicaja Banco vs. Caixabank SA | Unicaja Banco vs. ENCE Energa y |
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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