Correlation Between State Street and Caixabank
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Caixabank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Corp and Caixabank SA ADR, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Caixabank. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Caixabank.
Diversification Opportunities for State Street and Caixabank
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Caixabank is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and Caixabank SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixabank SA ADR and State Street 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 State Street Corp 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 ADR has no effect on the direction of State Street i.e., State Street and Caixabank go up and down completely randomly.
Pair Corralation between State Street and Caixabank
Considering the 90-day investment horizon State Street is expected to generate 147.55 times less return on investment than Caixabank. But when comparing it to its historical volatility, State Street Corp is 3.34 times less risky than Caixabank. It trades about 0.0 of its potential returns per unit of risk. Caixabank SA ADR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 128.00 in Caixabank SA ADR on January 26, 2024 and sell it today you would earn a total of 46.01 from holding Caixabank SA ADR or generate 35.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
State Street Corp vs. Caixabank SA ADR
Performance |
Timeline |
State Street Corp |
Caixabank SA ADR |
State Street and Caixabank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Street and Caixabank
The main advantage of trading using opposite State Street and Caixabank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.State Street vs. Invesco Plc | State Street vs. Franklin Resources | State Street vs. T Rowe Price | State Street vs. SEI Investments |
Caixabank vs. Lloyds Banking Group | Caixabank vs. Western Alliance Bancorporation | Caixabank vs. JAPAN POST BANK | Caixabank vs. Piraeus Bank SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Commodity Directory Find actively traded commodities issued by global exchanges |