Correlation Between Caixabank and MFE Mediaforeurope

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

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

Diversification Opportunities for Caixabank and MFE Mediaforeurope

-0.37

Correlation Coefficient

Caixabank  MFE Mediaforeurope

Very good diversification

The 3 months correlation between Caixabank and MFE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank SA and MFE Mediaforeurope NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFE Mediaforeurope 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 MFE Mediaforeurope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFE Mediaforeurope has no effect on the direction of Caixabank i.e., Caixabank and MFE Mediaforeurope go up and down completely randomly.

Pair Corralation between Caixabank and MFE Mediaforeurope

Assuming the 90 days trading horizon Caixabank SA is expected to generate 0.87 times more return on investment than MFE Mediaforeurope. However, Caixabank SA is 1.15 times less risky than MFE Mediaforeurope. It trades about 0.17 of its potential returns per unit of risk. MFE Mediaforeurope NV is currently generating about -0.09 per unit of risk. If you would invest  696.00  in Caixabank SA on May 6, 2025 and sell it today you would earn a total of  115.00  from holding Caixabank SA or generate 16.52% return on investment over 90 days.

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

Caixabank SA  vs.  MFE Mediaforeurope NV

Caixabank SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank SA are ranked lower than 13 (%) 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.

MFE Mediaforeurope

Risk-Adjusted Performance

Very Weak

Over the last 90 days MFE Mediaforeurope NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Caixabank and MFE Mediaforeurope

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

The idea behind Caixabank SA and MFE Mediaforeurope NV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..