Correlation Between Libertas 7 and Caixabank
Can any of the company-specific risk be diversified away by investing in both Libertas 7 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 Libertas 7 and Caixabank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libertas 7 SA and Caixabank SA, you can compare the effects of market volatilities on Libertas 7 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 Libertas 7 with a short position of Caixabank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libertas 7 and Caixabank.
Diversification Opportunities for Libertas 7 and Caixabank
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Libertas and Caixabank is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Libertas 7 SA and Caixabank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank SA and Libertas 7 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 Libertas 7 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 Libertas 7 i.e., Libertas 7 and Caixabank go up and down completely randomly.
Pair Corralation between Libertas 7 and Caixabank
Assuming the 90 days trading horizon Libertas 7 SA is expected to under-perform the Caixabank. In addition to that, Libertas 7 is 1.8 times more volatile than Caixabank SA. It trades about -0.02 of its total potential returns per unit of risk. Caixabank SA is currently generating about 0.31 per unit of volatility. If you would invest 521.00 in Caixabank SA on October 30, 2024 and sell it today you would earn a total of 49.00 from holding Caixabank SA or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Libertas 7 SA vs. Caixabank SA
Performance |
| Timeline |
| Libertas 7 SA |
| Caixabank SA |
Libertas 7 and Caixabank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libertas 7 and Caixabank
The main advantage of trading using opposite Libertas 7 and Caixabank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libertas 7 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.| Libertas 7 vs. Hispanotels Inversiones SOCIMI | Libertas 7 vs. Home Capital Rentals | Libertas 7 vs. Arteche Lantegi Elkartea | Libertas 7 vs. Borges Agricultural Industrial |
| Caixabank vs. Banco de Sabadell | Caixabank vs. Banco Santander | Caixabank vs. Bankinter | Caixabank vs. Repsol |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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