Correlation Between Caixabank Seleccin and Groupama Entreprises

Can any of the company-specific risk be diversified away by investing in both Caixabank Seleccin and Groupama Entreprises 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 Caixabank Seleccin and Groupama Entreprises into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Caixabank Seleccin Tendencias and Groupama Entreprises N, you can compare the effects of market volatilities on Caixabank Seleccin and Groupama Entreprises 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 Caixabank Seleccin with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank Seleccin and Groupama Entreprises.

Diversification Opportunities for Caixabank Seleccin and Groupama Entreprises

0.93

Correlation Coefficient

Caixabank Seleccin  Groupama Entreprises

Almost no diversification

The 3 months correlation between Caixabank and Groupama is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank Seleccin Tendencias and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and Caixabank Seleccin 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 Caixabank Seleccin Tendencias are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of Caixabank Seleccin i.e., Caixabank Seleccin and Groupama Entreprises go up and down completely randomly.

Pair Corralation between Caixabank Seleccin and Groupama Entreprises

Assuming the 90 days trading horizon Caixabank Seleccin Tendencias is expected to generate 54.21 times more return on investment than Groupama Entreprises. However, Caixabank Seleccin is 54.21 times more volatile than Groupama Entreprises N. It trades about 0.06 of its potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.97 per unit of risk. If you would invest  1,670  in Caixabank Seleccin Tendencias on September 22, 2024 and sell it today you would earn a total of  12.00  from holding Caixabank Seleccin Tendencias or generate 0.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	90.91%
Values	Daily Returns

Caixabank Seleccin Tendencias  vs.  Groupama Entreprises N

Caixabank Seleccin

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank Seleccin Tendencias are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Caixabank Seleccin may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Groupama Entreprises

Risk-Adjusted Performance

78 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 78 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Caixabank Seleccin and Groupama Entreprises

The main advantage of trading using opposite Caixabank Seleccin and Groupama Entreprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank Seleccin position performs unexpectedly, Groupama Entreprises 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 Groupama Entreprises will offset losses from the drop in Groupama Entreprises' long position.

The idea behind Caixabank Seleccin Tendencias and Groupama Entreprises N pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.