Correlation Between Caixabank Seleccin and CM AM

Can any of the company-specific risk be diversified away by investing in both Caixabank Seleccin and CM AM 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 CM AM 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 CM AM Monplus NE, you can compare the effects of market volatilities on Caixabank Seleccin and CM AM 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 CM AM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank Seleccin and CM AM.

Diversification Opportunities for Caixabank Seleccin and CM AM

0.93

Correlation Coefficient

Caixabank Seleccin  CM AM

Almost no diversification

The 3 months correlation between Caixabank and 0P0001F96C is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank Seleccin Tendencias and CM AM Monplus NE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM AM Monplus 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 CM AM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM AM Monplus has no effect on the direction of Caixabank Seleccin i.e., Caixabank Seleccin and CM AM go up and down completely randomly.

Pair Corralation between Caixabank Seleccin and CM AM

Assuming the 90 days trading horizon Caixabank Seleccin Tendencias is expected to generate 85.27 times more return on investment than CM AM. However, Caixabank Seleccin is 85.27 times more volatile than CM AM Monplus NE. It trades about 0.14 of its potential returns per unit of risk. CM AM Monplus NE is currently generating about 1.47 per unit of risk. If you would invest  1,623  in Caixabank Seleccin Tendencias on September 22, 2024 and sell it today you would earn a total of  68.00  from holding Caixabank Seleccin Tendencias or generate 4.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Caixabank Seleccin Tendencias  vs.  CM AM Monplus NE

Caixabank Seleccin

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank Seleccin Tendencias are ranked lower than 14 (%) 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.

CM AM Monplus

Risk-Adjusted Performance

96 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in CM AM Monplus NE are ranked lower than 96 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, CM AM is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Caixabank Seleccin and CM AM

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

The idea behind Caixabank Seleccin Tendencias and CM AM Monplus NE 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.