Correlation Between TFS FINANCIAL and CAIXABANK UNADR
Can any of the company-specific risk be diversified away by investing in both TFS FINANCIAL and CAIXABANK UNADR 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 TFS FINANCIAL and CAIXABANK UNADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFS FINANCIAL and CAIXABANK UNADR 13, you can compare the effects of market volatilities on TFS FINANCIAL and CAIXABANK UNADR 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 TFS FINANCIAL with a short position of CAIXABANK UNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFS FINANCIAL and CAIXABANK UNADR.
Diversification Opportunities for TFS FINANCIAL and CAIXABANK UNADR
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TFS and CAIXABANK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL and CAIXABANK UNADR 13 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIXABANK UNADR 13 and TFS FINANCIAL 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 TFS FINANCIAL are associated (or correlated) with CAIXABANK UNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIXABANK UNADR 13 has no effect on the direction of TFS FINANCIAL i.e., TFS FINANCIAL and CAIXABANK UNADR go up and down completely randomly.
Pair Corralation between TFS FINANCIAL and CAIXABANK UNADR
Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 1.28 times more return on investment than CAIXABANK UNADR. However, TFS FINANCIAL is 1.28 times more volatile than CAIXABANK UNADR 13. It trades about 0.23 of its potential returns per unit of risk. CAIXABANK UNADR 13 is currently generating about -0.24 per unit of risk. If you would invest 1,180 in TFS FINANCIAL on September 3, 2024 and sell it today you would earn a total of 150.00 from holding TFS FINANCIAL or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFS FINANCIAL vs. CAIXABANK UNADR 13
Performance |
| Timeline |
| TFS FINANCIAL |
| CAIXABANK UNADR 13 |
TFS FINANCIAL and CAIXABANK UNADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFS FINANCIAL and CAIXABANK UNADR
The main advantage of trading using opposite TFS FINANCIAL and CAIXABANK UNADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL position performs unexpectedly, CAIXABANK UNADR 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 UNADR will offset losses from the drop in CAIXABANK UNADR's long position.| TFS FINANCIAL vs. Gladstone Investment | TFS FINANCIAL vs. Infrastrutture Wireless Italiane | TFS FINANCIAL vs. WillScot Mobile Mini | TFS FINANCIAL vs. HK Electric Investments |
| CAIXABANK UNADR vs. Postal Savings Bank | CAIXABANK UNADR vs. Superior Plus Corp | CAIXABANK UNADR vs. NMI Holdings | CAIXABANK UNADR vs. Origin Agritech |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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