Correlation Between BancFirst and BBVA Banco
Can any of the company-specific risk be diversified away by investing in both BancFirst and BBVA Banco 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 BancFirst and BBVA Banco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BancFirst and BBVA Banco Frances, you can compare the effects of market volatilities on BancFirst and BBVA Banco 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 BancFirst with a short position of BBVA Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of BancFirst and BBVA Banco.
Diversification Opportunities for BancFirst and BBVA Banco
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BancFirst and BBVA is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BancFirst and BBVA Banco Frances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBVA Banco Frances and BancFirst 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 BancFirst are associated (or correlated) with BBVA Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBVA Banco Frances has no effect on the direction of BancFirst i.e., BancFirst and BBVA Banco go up and down completely randomly.
Pair Corralation between BancFirst and BBVA Banco
Given the investment horizon of 90 days BancFirst is expected to generate 1.13 times less return on investment than BBVA Banco. In addition to that, BancFirst is 1.11 times more volatile than BBVA Banco Frances. It trades about 0.2 of its total potential returns per unit of risk. BBVA Banco Frances is currently generating about 0.25 per unit of volatility. If you would invest 1,377 in BBVA Banco Frances on September 1, 2024 and sell it today you would earn a total of 259.00 from holding BBVA Banco Frances or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BancFirst vs. BBVA Banco Frances
Performance |
| Timeline |
| BancFirst |
| BBVA Banco Frances |
BancFirst and BBVA Banco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BancFirst and BBVA Banco
The main advantage of trading using opposite BancFirst and BBVA Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BancFirst position performs unexpectedly, BBVA Banco 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 BBVA Banco will offset losses from the drop in BBVA Banco's long position.| BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First Bancorp |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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