Correlation Between CAIXABANK UNADR and UNICREDIT SPA
Can any of the company-specific risk be diversified away by investing in both CAIXABANK UNADR and UNICREDIT SPA 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 UNADR and UNICREDIT SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIXABANK UNADR 13 and UNICREDIT SPA ADR, you can compare the effects of market volatilities on CAIXABANK UNADR and UNICREDIT SPA 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 UNADR with a short position of UNICREDIT SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIXABANK UNADR and UNICREDIT SPA.
Diversification Opportunities for CAIXABANK UNADR and UNICREDIT SPA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CAIXABANK and UNICREDIT is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CAIXABANK UNADR 13 and UNICREDIT SPA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNICREDIT SPA ADR and CAIXABANK UNADR 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 UNADR 13 are associated (or correlated) with UNICREDIT SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNICREDIT SPA ADR has no effect on the direction of CAIXABANK UNADR i.e., CAIXABANK UNADR and UNICREDIT SPA go up and down completely randomly.
Pair Corralation between CAIXABANK UNADR and UNICREDIT SPA
Assuming the 90 days trading horizon CAIXABANK UNADR 13 is expected to under-perform the UNICREDIT SPA. But the stock apears to be less risky and, when comparing its historical volatility, CAIXABANK UNADR 13 is 1.03 times less risky than UNICREDIT SPA. The stock trades about -0.03 of its potential returns per unit of risk. The UNICREDIT SPA ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,774 in UNICREDIT SPA ADR on September 24, 2024 and sell it today you would earn a total of 76.00 from holding UNICREDIT SPA ADR or generate 4.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CAIXABANK UNADR 13 vs. UNICREDIT SPA ADR
Performance |
Timeline |
CAIXABANK UNADR 13 |
UNICREDIT SPA ADR |
CAIXABANK UNADR and UNICREDIT SPA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CAIXABANK UNADR and UNICREDIT SPA
The main advantage of trading using opposite CAIXABANK UNADR and UNICREDIT SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIXABANK UNADR position performs unexpectedly, UNICREDIT SPA 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 UNICREDIT SPA will offset losses from the drop in UNICREDIT SPA's long position.CAIXABANK UNADR vs. POSBO UNSPADRS20YC1 | CAIXABANK UNADR vs. Postal Savings Bank | CAIXABANK UNADR vs. Truist Financial | CAIXABANK UNADR vs. OVERSEA CHINUNSPADR2 |
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Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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