Correlation Between CaixaBank and PT Bank
Can any of the company-specific risk be diversified away by investing in both CaixaBank and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CaixaBank SA and PT Bank Rakyat, you can compare the effects of market volatilities on CaixaBank and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CaixaBank and PT Bank.
Diversification Opportunities for CaixaBank and PT Bank
Very good diversification
The 3 months correlation between CaixaBank and BKRKF is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CaixaBank SA and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of CaixaBank i.e., CaixaBank and PT Bank go up and down completely randomly.
Pair Corralation between CaixaBank and PT Bank
Assuming the 90 days horizon CaixaBank SA is expected to generate 1.14 times more return on investment than PT Bank. However, CaixaBank is 1.14 times more volatile than PT Bank Rakyat. It trades about 0.06 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.01 per unit of risk. If you would invest 314.00 in CaixaBank SA on August 30, 2024 and sell it today you would earn a total of 201.00 from holding CaixaBank SA or generate 64.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.89% |
| Values | Daily Returns |
CaixaBank SA vs. PT Bank Rakyat
Performance |
| Timeline |
| CaixaBank SA |
| PT Bank Rakyat |
CaixaBank and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CaixaBank and PT Bank
The main advantage of trading using opposite CaixaBank and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CaixaBank position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| CaixaBank vs. Bankinter SA ADR | CaixaBank vs. First Horizon | CaixaBank vs. JAPAN POST BANK | CaixaBank vs. JAPAN POST BANK |
| PT Bank vs. Bank Mandiri Persero | PT Bank vs. Piraeus Bank SA | PT Bank vs. Eurobank Ergasias Services | PT Bank vs. Kasikornbank Public Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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