Correlation Between BBVA Banco and United States
Can any of the company-specific risk be diversified away by investing in both BBVA Banco and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on BBVA Banco and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Banco and United States.
Diversification Opportunities for BBVA Banco and United States
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between BBVA and United is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Banco Frances and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of BBVA Banco i.e., BBVA Banco and United States go up and down completely randomly.
Pair Corralation between BBVA Banco and United States
Assuming the 90 days trading horizon BBVA Banco Frances is expected to generate 0.74 times more return on investment than United States. However, BBVA Banco Frances is 1.35 times less risky than United States. It trades about 0.26 of its potential returns per unit of risk. United States Steel is currently generating about -0.04 per unit of risk. If you would invest 532,000 in BBVA Banco Frances on August 28, 2024 and sell it today you would earn a total of 80,000 from holding BBVA Banco Frances or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BBVA Banco Frances vs. United States Steel
Performance |
| Timeline |
| BBVA Banco Frances |
| United States Steel |
BBVA Banco and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBVA Banco and United States
The main advantage of trading using opposite BBVA Banco and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBVA Banco position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| BBVA Banco vs. Pampa Energia SA | BBVA Banco vs. American Express Co | BBVA Banco vs. United States Steel | BBVA Banco vs. Pfizer Inc |
| United States vs. Pfizer Inc | United States vs. Distribuidora de Gas | United States vs. IRSA Propiedades Comerciales | United States vs. Molinos Agro 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 CEOs Directory module to screen CEOs from public companies around the world.
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