Correlation Between Banco Bilbao and Barclays PLC
Can any of the company-specific risk be diversified away by investing in both Banco Bilbao and Barclays PLC 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 Banco Bilbao and Barclays PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bilbao Vizcaya and Barclays PLC, you can compare the effects of market volatilities on Banco Bilbao and Barclays PLC 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 Banco Bilbao with a short position of Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bilbao and Barclays PLC.
Diversification Opportunities for Banco Bilbao and Barclays PLC
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Banco and Barclays is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bilbao Vizcaya and Barclays PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC and Banco Bilbao 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 Banco Bilbao Vizcaya are associated (or correlated) with Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC has no effect on the direction of Banco Bilbao i.e., Banco Bilbao and Barclays PLC go up and down completely randomly.
Pair Corralation between Banco Bilbao and Barclays PLC
Assuming the 90 days horizon Banco Bilbao Vizcaya is expected to under-perform the Barclays PLC. But the pink sheet apears to be less risky and, when comparing its historical volatility, Banco Bilbao Vizcaya is 1.21 times less risky than Barclays PLC. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Barclays PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 301.00 in Barclays PLC on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Barclays PLC or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bilbao Vizcaya vs. Barclays PLC
Performance |
| Timeline |
| Banco Bilbao Vizcaya |
| Barclays PLC |
Banco Bilbao and Barclays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bilbao and Barclays PLC
The main advantage of trading using opposite Banco Bilbao and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bilbao position performs unexpectedly, Barclays PLC 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.| Banco Bilbao vs. Bank of America | Banco Bilbao vs. Barclays PLC | Banco Bilbao vs. Bank of America | Banco Bilbao vs. ABN AMRO Bank |
| Barclays PLC vs. ABN AMRO Bank | Barclays PLC vs. Bank of America | Barclays PLC vs. Bank of America | Barclays PLC vs. Banco Bilbao Vizcaya |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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