Correlation Between Renta Corporacion and Caixabank
Can any of the company-specific risk be diversified away by investing in both Renta Corporacion 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 Renta Corporacion and Caixabank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renta Corporacion Real and Caixabank SA, you can compare the effects of market volatilities on Renta Corporacion 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 Renta Corporacion with a short position of Caixabank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renta Corporacion and Caixabank.
Diversification Opportunities for Renta Corporacion and Caixabank
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Renta and Caixabank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Renta Corporacion Real and Caixabank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank SA and Renta Corporacion 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 Renta Corporacion Real 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 Renta Corporacion i.e., Renta Corporacion and Caixabank go up and down completely randomly.
Pair Corralation between Renta Corporacion and Caixabank
Assuming the 90 days trading horizon Renta Corporacion Real is expected to generate 1.09 times more return on investment than Caixabank. However, Renta Corporacion is 1.09 times more volatile than Caixabank SA. It trades about 0.12 of its potential returns per unit of risk. Caixabank SA is currently generating about -0.09 per unit of risk. If you would invest 68.00 in Renta Corporacion Real on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Renta Corporacion Real or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Renta Corporacion Real vs. Caixabank SA
Performance |
| Timeline |
| Renta Corporacion Real |
| Caixabank SA |
Renta Corporacion and Caixabank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renta Corporacion and Caixabank
The main advantage of trading using opposite Renta Corporacion and Caixabank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renta Corporacion 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.| Renta Corporacion vs. Caixabank SA | Renta Corporacion vs. Tier1 Technology SA | Renta Corporacion vs. Melia Hotels | Renta Corporacion vs. All Iron Re |
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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