Correlation Between Metrovacesa and Caixabank
Can any of the company-specific risk be diversified away by investing in both Metrovacesa 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 Metrovacesa and Caixabank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrovacesa SA and Caixabank SA, you can compare the effects of market volatilities on Metrovacesa 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 Metrovacesa with a short position of Caixabank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrovacesa and Caixabank.
Diversification Opportunities for Metrovacesa and Caixabank
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metrovacesa and Caixabank is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Metrovacesa SA and Caixabank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank SA and Metrovacesa 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 Metrovacesa 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 Metrovacesa i.e., Metrovacesa and Caixabank go up and down completely randomly.
Pair Corralation between Metrovacesa and Caixabank
Assuming the 90 days trading horizon Metrovacesa SA is expected to generate 0.4 times more return on investment than Caixabank. However, Metrovacesa SA is 2.48 times less risky than Caixabank. It trades about 0.14 of its potential returns per unit of risk. Caixabank SA is currently generating about -0.11 per unit of risk. If you would invest 851.00 in Metrovacesa SA on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Metrovacesa SA or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrovacesa SA vs. Caixabank SA
Performance |
| Timeline |
| Metrovacesa SA |
| Caixabank SA |
Metrovacesa and Caixabank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrovacesa and Caixabank
The main advantage of trading using opposite Metrovacesa and Caixabank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrovacesa 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.| Metrovacesa vs. NH Hoteles | Metrovacesa vs. Fomento de Construcciones | Metrovacesa vs. Inmobiliaria Colonial SA | Metrovacesa vs. Indra A |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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