Correlation Between Swedbank Robur and Caixabank Seleccin

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

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

Diversification Opportunities for Swedbank Robur and Caixabank Seleccin

0.89

Correlation Coefficient

Swedbank Robur  Caixabank Seleccin

Very poor diversification

The 3 months correlation between Swedbank and Caixabank is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank Robur Corporate and Caixabank Seleccin Tendencias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank Seleccin and Swedbank Robur 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 Swedbank Robur Corporate 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 Swedbank Robur i.e., Swedbank Robur and Caixabank Seleccin go up and down completely randomly.

Pair Corralation between Swedbank Robur and Caixabank Seleccin

Assuming the 90 days trading horizon Swedbank Robur is expected to generate 5.15 times less return on investment than Caixabank Seleccin. But when comparing it to its historical volatility, Swedbank Robur Corporate is 3.96 times less risky than Caixabank Seleccin. It trades about 0.14 of its potential returns per unit of risk. Caixabank Seleccin Tendencias is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,567  in Caixabank Seleccin Tendencias on September 22, 2024 and sell it today you would earn a total of  124.00  from holding Caixabank Seleccin Tendencias or generate 7.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.92%
Values	Daily Returns

Swedbank Robur Corporate  vs.  Caixabank Seleccin Tendencias

Swedbank Robur Corporate

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank Robur Corporate are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Swedbank Robur is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Swedbank Robur and Caixabank Seleccin

The main advantage of trading using opposite Swedbank Robur and Caixabank Seleccin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedbank Robur 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 Swedbank Robur Corporate 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.