Correlation Between Caixabank and Robot SA

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

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

Diversification Opportunities for Caixabank and Robot SA

0.57

Correlation Coefficient

Caixabank  Robot SA

Very weak diversification

The 3 months correlation between Caixabank and Robot is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and Robot SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robot SA and Caixabank 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 SA are associated (or correlated) with Robot SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robot SA has no effect on the direction of Caixabank i.e., Caixabank and Robot SA go up and down completely randomly.

Pair Corralation between Caixabank and Robot SA

Assuming the 90 days trading horizon Caixabank SA is expected to generate 1.28 times more return on investment than Robot SA. However, Caixabank is 1.28 times more volatile than Robot SA. It trades about 0.3 of its potential returns per unit of risk. Robot SA is currently generating about 0.09 per unit of risk. If you would invest  521.00  in Caixabank SA on December 30, 2024 and sell it today you would earn a total of  205.00  from holding Caixabank SA or generate 39.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Caixabank SA  vs.  Robot SA

Caixabank SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank SA are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Caixabank exhibited solid returns over the last few months and may actually be approaching a breakup point.

Robot SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robot SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Robot SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Caixabank and Robot SA

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

The idea behind Caixabank SA and Robot SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.