Correlation Between Elaia Investment and Caixabank

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

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

Diversification Opportunities for Elaia Investment and Caixabank

0.15

Correlation Coefficient

Elaia Investment  Caixabank

Average diversification

The 3 months correlation between Elaia and Caixabank is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Elaia Investment Spain and Caixabank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank SA and Elaia Investment 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 Elaia Investment Spain are associated (or correlated) with Caixabank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixabank SA has no effect on the direction of Elaia Investment i.e., Elaia Investment and Caixabank go up and down completely randomly.

Pair Corralation between Elaia Investment and Caixabank

Assuming the 90 days trading horizon Elaia Investment Spain is expected to under-perform the Caixabank. In addition to that, Elaia Investment is 2.28 times more volatile than Caixabank SA. It trades about -0.16 of its total potential returns per unit of risk. Caixabank SA is currently generating about -0.04 per unit of volatility. If you would invest  550.00  in Caixabank SA on October 9, 2024 and sell it today you would lose (17.00) from holding Caixabank SA or give up 3.09% of portfolio value over 90 days.

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

Elaia Investment Spain  vs.  Caixabank SA

Elaia Investment Spain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elaia Investment Spain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Caixabank SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Caixabank is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elaia Investment and Caixabank

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

The idea behind Elaia Investment Spain and Caixabank 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.