Correlation Between Caixabank and Mercal Inmuebles
Can any of the company-specific risk be diversified away by investing in both Caixabank and Mercal Inmuebles 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 Mercal Inmuebles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Mercal Inmuebles Socimi, you can compare the effects of market volatilities on Caixabank and Mercal Inmuebles 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 Mercal Inmuebles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Mercal Inmuebles.
Diversification Opportunities for Caixabank and Mercal Inmuebles
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caixabank and Mercal is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Mercal Inmuebles Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercal Inmuebles Socimi 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 Mercal Inmuebles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercal Inmuebles Socimi has no effect on the direction of Caixabank i.e., Caixabank and Mercal Inmuebles go up and down completely randomly.
Pair Corralation between Caixabank and Mercal Inmuebles
Assuming the 90 days trading horizon Caixabank SA is expected to generate 0.72 times more return on investment than Mercal Inmuebles. However, Caixabank SA is 1.4 times less risky than Mercal Inmuebles. It trades about 0.09 of its potential returns per unit of risk. Mercal Inmuebles Socimi is currently generating about 0.03 per unit of risk. If you would invest 372.00 in Caixabank SA on September 3, 2024 and sell it today you would earn a total of 143.00 from holding Caixabank SA or generate 38.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.99% |
| Values | Daily Returns |
Caixabank SA vs. Mercal Inmuebles Socimi
Performance |
| Timeline |
| Caixabank SA |
| Mercal Inmuebles Socimi |
Caixabank and Mercal Inmuebles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Mercal Inmuebles
The main advantage of trading using opposite Caixabank and Mercal Inmuebles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Mercal Inmuebles 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 Mercal Inmuebles will offset losses from the drop in Mercal Inmuebles' long position.The idea behind Caixabank SA and Mercal Inmuebles Socimi 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.| Mercal Inmuebles vs. Parlem Telecom Companyia | Mercal Inmuebles vs. Tier1 Technology SA | Mercal Inmuebles vs. Caixabank SA | Mercal Inmuebles vs. Inhome Prime Properties |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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