Correlation Between Caixabank and General De

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

By analyzing existing cross correlation between Caixabank SA and General de Alquiler, you can compare the effects of market volatilities on Caixabank and General De 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 General De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixabank and General De.

Diversification Opportunities for Caixabank and General De

0.69

Correlation Coefficient

Caixabank  General De

Poor diversification

The 3 months correlation between Caixabank and General is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and General de Alquiler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General de Alquiler 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 General De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General de Alquiler has no effect on the direction of Caixabank i.e., Caixabank and General De go up and down completely randomly.

Pair Corralation between Caixabank and General De

Assuming the 90 days trading horizon Caixabank SA is expected to generate 0.97 times more return on investment than General De. However, Caixabank SA is 1.03 times less risky than General De. It trades about 0.14 of its potential returns per unit of risk. General de Alquiler is currently generating about 0.05 per unit of risk. If you would invest  653.00  in Caixabank SA on April 22, 2025 and sell it today you would earn a total of  92.00  from holding Caixabank SA or generate 14.09% return on investment over 90 days.

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

Caixabank SA  vs.  General de Alquiler

Caixabank SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank SA are ranked lower than 11 (%) 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.

General de Alquiler

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in General de Alquiler are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, General De is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Caixabank and General De

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

The idea behind Caixabank SA and General de Alquiler 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..