Correlation Between Disney and Caixabank
Can any of the company-specific risk be diversified away by investing in both Disney and Caixabank 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 Disney and Caixabank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Caixabank SA ADR, you can compare the effects of market volatilities on Disney and Caixabank 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 Disney with a short position of Caixabank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Caixabank.
Diversification Opportunities for Disney and Caixabank
Average diversification
The 3 months correlation between Disney and Caixabank is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Caixabank SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank SA ADR and Disney 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 Walt Disney are associated (or correlated) with Caixabank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixabank SA ADR has no effect on the direction of Disney i.e., Disney and Caixabank go up and down completely randomly.
Pair Corralation between Disney and Caixabank
Considering the 90-day investment horizon Disney is expected to generate 9.11 times less return on investment than Caixabank. But when comparing it to its historical volatility, Walt Disney is 2.02 times less risky than Caixabank. It trades about 0.06 of its potential returns per unit of risk. Caixabank SA ADR is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 179.00 in Caixabank SA ADR on November 30, 2024 and sell it today you would earn a total of 52.00 from holding Caixabank SA ADR or generate 29.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Caixabank SA ADR
Performance |
| Timeline |
| Walt Disney |
| Caixabank SA ADR |
Disney and Caixabank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Caixabank
The main advantage of trading using opposite Disney and Caixabank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Caixabank 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 Caixabank will offset losses from the drop in Caixabank's long position.| Disney vs. Hall of Fame | Disney vs. Wisekey International Holding | Disney vs. Oriental Culture Holding | Disney vs. Aquagold International |
| Caixabank vs. Permanent TSB Group | Caixabank vs. Bank of Botetourt | Caixabank vs. Cashmere Valley Bank | Caixabank vs. Oak Valley Bancorp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |