Correlation Between Caixabank and Tander Inversiones
Can any of the company-specific risk be diversified away by investing in both Caixabank and Tander Inversiones 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 Tander Inversiones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixabank SA and Tander Inversiones SOCIMI, you can compare the effects of market volatilities on Caixabank and Tander Inversiones 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 Tander Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and Tander Inversiones.
Diversification Opportunities for Caixabank and Tander Inversiones
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caixabank and Tander is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Tander Inversiones SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tander Inversiones 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 Tander Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tander Inversiones SOCIMI has no effect on the direction of Caixabank i.e., Caixabank and Tander Inversiones go up and down completely randomly.
Pair Corralation between Caixabank and Tander Inversiones
Assuming the 90 days trading horizon Caixabank SA is expected to generate 3.72 times more return on investment than Tander Inversiones. However, Caixabank is 3.72 times more volatile than Tander Inversiones SOCIMI. It trades about 0.1 of its potential returns per unit of risk. Tander Inversiones SOCIMI is currently generating about 0.02 per unit of risk. If you would invest 361.00 in Caixabank SA on September 2, 2024 and sell it today you would earn a total of 154.00 from holding Caixabank SA or generate 42.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Caixabank SA vs. Tander Inversiones SOCIMI
Performance |
| Timeline |
| Caixabank SA |
| Tander Inversiones SOCIMI |
Caixabank and Tander Inversiones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixabank and Tander Inversiones
The main advantage of trading using opposite Caixabank and Tander Inversiones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank position performs unexpectedly, Tander Inversiones 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 Tander Inversiones will offset losses from the drop in Tander Inversiones' long position.| Caixabank vs. Banco de Sabadell | Caixabank vs. Banco Santander | Caixabank vs. Bankinter | Caixabank vs. Repsol |
| Tander Inversiones vs. Industria de Diseno | Tander Inversiones vs. Iberdrola SA | Tander Inversiones vs. Banco Santander | Tander Inversiones 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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