Correlation Between Algebris UCITS and Caixabank Seleccin

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

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

Diversification Opportunities for Algebris UCITS and Caixabank Seleccin

0.0

Correlation Coefficient

Algebris UCITS  Caixabank Seleccin

Pay attention - limited upside

The 3 months correlation between Algebris and Caixabank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Algebris UCITS Funds and Caixabank Seleccin Tendencias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank Seleccin and Algebris UCITS 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 Algebris UCITS Funds are associated (or correlated) with Caixabank Seleccin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixabank Seleccin has no effect on the direction of Algebris UCITS i.e., Algebris UCITS and Caixabank Seleccin go up and down completely randomly.

Pair Corralation between Algebris UCITS and Caixabank Seleccin

Assuming the 90 days trading horizon Algebris UCITS Funds is expected to generate 0.28 times more return on investment than Caixabank Seleccin. However, Algebris UCITS Funds is 3.56 times less risky than Caixabank Seleccin. It trades about 0.27 of its potential returns per unit of risk. Caixabank Seleccin Tendencias is currently generating about -0.34 per unit of risk. If you would invest  14,822  in Algebris UCITS Funds on October 5, 2024 and sell it today you would earn a total of  113.00  from holding Algebris UCITS Funds or generate 0.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Algebris UCITS Funds  vs.  Caixabank Seleccin Tendencias

Algebris UCITS Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Algebris UCITS Funds has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Algebris UCITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Caixabank Seleccin

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Caixabank Seleccin Tendencias has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Caixabank Seleccin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Algebris UCITS and Caixabank Seleccin

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

The idea behind Algebris UCITS Funds and Caixabank Seleccin Tendencias 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.