Correlation Between Barclays PLC and Banco Bilbao
Can any of the company-specific risk be diversified away by investing in both Barclays PLC and Banco Bilbao 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 Barclays PLC and Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC ADR and Banco Bilbao Viscaya, you can compare the effects of market volatilities on Barclays PLC and Banco Bilbao 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 Barclays PLC with a short position of Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and Banco Bilbao.
Diversification Opportunities for Barclays PLC and Banco Bilbao
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barclays and Banco is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC ADR and Banco Bilbao Viscaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bilbao Viscaya and Barclays PLC 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 Barclays PLC ADR are associated (or correlated) with Banco Bilbao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bilbao Viscaya has no effect on the direction of Barclays PLC i.e., Barclays PLC and Banco Bilbao go up and down completely randomly.
Pair Corralation between Barclays PLC and Banco Bilbao
Considering the 90-day investment horizon Barclays PLC ADR is expected to generate 1.06 times more return on investment than Banco Bilbao. However, Barclays PLC is 1.06 times more volatile than Banco Bilbao Viscaya. It trades about 0.05 of its potential returns per unit of risk. Banco Bilbao Viscaya is currently generating about -0.04 per unit of risk. If you would invest 1,221 in Barclays PLC ADR on August 26, 2024 and sell it today you would earn a total of 76.00 from holding Barclays PLC ADR or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays PLC ADR vs. Banco Bilbao Viscaya
Performance |
| Timeline |
| Barclays PLC ADR |
| Banco Bilbao Viscaya |
Barclays PLC and Banco Bilbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays PLC and Banco Bilbao
The main advantage of trading using opposite Barclays PLC and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC position performs unexpectedly, Banco Bilbao 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 Bilbao will offset losses from the drop in Banco Bilbao's long position.| Barclays PLC vs. Banco Bilbao Viscaya | Barclays PLC vs. Banco Santander SA | Barclays PLC vs. UBS Group AG | Barclays PLC vs. HSBC Holdings PLC |
| Banco Bilbao vs. Barclays PLC ADR | Banco Bilbao vs. ING Group NV | Banco Bilbao vs. Banco Santander SA | Banco Bilbao vs. HSBC Holdings PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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