Correlation Between Eurobank Ergasias and CaixaBank
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias 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 Eurobank Ergasias and CaixaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias SA and CaixaBank SA, you can compare the effects of market volatilities on Eurobank Ergasias 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 Eurobank Ergasias with a short position of CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and CaixaBank.
Diversification Opportunities for Eurobank Ergasias and CaixaBank
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eurobank and CaixaBank is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias SA and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA and Eurobank Ergasias 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 Eurobank Ergasias SA 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 has no effect on the direction of Eurobank Ergasias i.e., Eurobank Ergasias and CaixaBank go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and CaixaBank
Assuming the 90 days horizon Eurobank Ergasias is expected to generate 3.29 times less return on investment than CaixaBank. But when comparing it to its historical volatility, Eurobank Ergasias SA is 2.85 times less risky than CaixaBank. It trades about 0.05 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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 | Insignificant |
| Accuracy | 63.96% |
| Values | Daily Returns |
Eurobank Ergasias SA vs. CaixaBank SA
Performance |
| Timeline |
| Eurobank Ergasias |
| CaixaBank SA |
Eurobank Ergasias and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and CaixaBank
The main advantage of trading using opposite Eurobank Ergasias and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias 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.| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. Piraeus Bank SA | Eurobank Ergasias vs. Alpha Bank SA | Eurobank Ergasias vs. First Citizens BancShares |
| CaixaBank vs. Bankinter SA ADR | CaixaBank vs. First Horizon | CaixaBank vs. JAPAN POST BANK | CaixaBank vs. JAPAN POST BANK |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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