Correlation Between BBVA Banco and Banco De

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both BBVA Banco and Banco De 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 Banco De 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 Banco De Chile, you can compare the effects of market volatilities on BBVA Banco and Banco De 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 Banco De. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Banco and Banco De.

Diversification Opportunities for BBVA Banco and Banco De

BBVABancoDiversified AwayBBVABancoDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between BBVA and Banco is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Banco Frances and Banco De Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco De Chile 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 Banco De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco De Chile has no effect on the direction of BBVA Banco i.e., BBVA Banco and Banco De go up and down completely randomly.

Pair Corralation between BBVA Banco and Banco De

Given the investment horizon of 90 days BBVA Banco Frances is expected to under-perform the Banco De. In addition to that, BBVA Banco is 3.05 times more volatile than Banco De Chile. It trades about -0.32 of its total potential returns per unit of risk. Banco De Chile is currently generating about 0.35 per unit of volatility. If you would invest  2,424  in Banco De Chile on November 30, 2024 and sell it today you would earn a total of  196.00  from holding Banco De Chile or generate 8.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

BBVA Banco Frances  vs.  Banco De Chile

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15BBAR BCH
       Timeline  
BBVA Banco Frances 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in BBVA Banco Frances are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BBVA Banco may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb16171819202122232425
Banco De Chile 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Banco De Chile are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Banco De demonstrated solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb222324252627

BBVA Banco and Banco De Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.96-10.46-6.95-3.450.05843.57.0610.6214.18 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15BBAR BCH
       Returns  

Pair Trading with BBVA Banco and Banco De

The main advantage of trading using opposite BBVA Banco and Banco De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBVA Banco position performs unexpectedly, Banco De 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 Banco De will offset losses from the drop in Banco De's long position.
The idea behind BBVA Banco Frances and Banco De Chile 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.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments