Correlation Between KBC Group and CaixaBank

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

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

Diversification Opportunities for KBC Group and CaixaBank

0.9

Correlation Coefficient

KBC Group  CaixaBank

Almost no diversification

The 3 months correlation between KBC and CaixaBank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KBC Group NV and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA and KBC Group 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 KBC Group NV 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 KBC Group i.e., KBC Group and CaixaBank go up and down completely randomly.

Pair Corralation between KBC Group and CaixaBank

Assuming the 90 days horizon KBC Group NV is expected to generate 0.85 times more return on investment than CaixaBank. However, KBC Group NV is 1.18 times less risky than CaixaBank. It trades about 0.15 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.12 per unit of risk. If you would invest  7,986  in KBC Group NV on April 25, 2025 and sell it today you would earn a total of  964.00  from holding KBC Group NV or generate 12.07% return on investment over 90 days.

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

KBC Group NV  vs.  CaixaBank SA

KBC Group NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Group NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KBC Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CaixaBank SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CaixaBank SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, CaixaBank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with KBC Group and CaixaBank

The main advantage of trading using opposite KBC Group and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Group 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 KBC Group NV 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.