Correlation Between CaixaBank and First Horizon
Can any of the company-specific risk be diversified away by investing in both CaixaBank and First Horizon 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 First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CaixaBank SA and First Horizon, you can compare the effects of market volatilities on CaixaBank and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of CaixaBank and First Horizon.
Diversification Opportunities for CaixaBank and First Horizon
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between CaixaBank and First is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CaixaBank SA and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of CaixaBank i.e., CaixaBank and First Horizon go up and down completely randomly.
Pair Corralation between CaixaBank and First Horizon
Assuming the 90 days horizon CaixaBank SA is expected to generate 6.68 times more return on investment than First Horizon. However, CaixaBank is 6.68 times more volatile than First Horizon. It trades about 0.22 of its potential returns per unit of risk. First Horizon is currently generating about 0.23 per unit of risk. If you would invest 525.00 in CaixaBank SA on November 3, 2024 and sell it today you would earn a total of 51.00 from holding CaixaBank SA or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
CaixaBank SA vs. First Horizon
Performance |
| Timeline |
| CaixaBank SA |
| First Horizon |
CaixaBank and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CaixaBank and First Horizon
The main advantage of trading using opposite CaixaBank and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CaixaBank position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| CaixaBank vs. Bankinter SA ADR | CaixaBank vs. First Horizon | CaixaBank vs. JAPAN POST BANK | CaixaBank vs. JAPAN POST BANK |
| First Horizon vs. Coda Octopus Group | First Horizon vs. Goosehead Insurance | First Horizon vs. Everspin Technologies | First Horizon vs. Guangdong Investment Limited |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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