Correlation Between BBVA Banco and Ledesma SAAI
Can any of the company-specific risk be diversified away by investing in both BBVA Banco and Ledesma SAAI 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 BBVA Banco and Ledesma SAAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBVA Banco Frances and Ledesma SAAI, you can compare the effects of market volatilities on BBVA Banco and Ledesma SAAI 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 BBVA Banco with a short position of Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Banco and Ledesma SAAI.
Diversification Opportunities for BBVA Banco and Ledesma SAAI
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BBVA and Ledesma is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Banco Frances and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI and BBVA Banco 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 BBVA Banco Frances are associated (or correlated) with Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of BBVA Banco i.e., BBVA Banco and Ledesma SAAI go up and down completely randomly.
Pair Corralation between BBVA Banco and Ledesma SAAI
Assuming the 90 days trading horizon BBVA Banco Frances is expected to generate 2.82 times more return on investment than Ledesma SAAI. However, BBVA Banco is 2.82 times more volatile than Ledesma SAAI. It trades about 0.3 of its potential returns per unit of risk. Ledesma SAAI is currently generating about -0.08 per unit of risk. If you would invest 667,000 in BBVA Banco Frances on October 20, 2024 and sell it today you would earn a total of 196,000 from holding BBVA Banco Frances or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
BBVA Banco Frances vs. Ledesma SAAI
Performance |
| Timeline |
| BBVA Banco Frances |
| Ledesma SAAI |
BBVA Banco and Ledesma SAAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBVA Banco and Ledesma SAAI
The main advantage of trading using opposite BBVA Banco and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBVA Banco position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.| BBVA Banco vs. American Express Co | BBVA Banco vs. QUALCOMM Incorporated | BBVA Banco vs. United States Steel | BBVA Banco vs. Pfizer Inc |
| Ledesma SAAI vs. Molinos Agro SA | Ledesma SAAI vs. Cresud SA | Ledesma SAAI vs. San Miguel AG | Ledesma SAAI vs. Inversora Juramento 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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