Correlation Between BBVA Banco and Christian Dior
Can any of the company-specific risk be diversified away by investing in both BBVA Banco and Christian Dior 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 Christian Dior 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 Christian Dior SE, you can compare the effects of market volatilities on BBVA Banco and Christian Dior 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 Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Banco and Christian Dior.
Diversification Opportunities for BBVA Banco and Christian Dior
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BBVA and Christian is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Banco Frances and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE 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 Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of BBVA Banco i.e., BBVA Banco and Christian Dior go up and down completely randomly.
Pair Corralation between BBVA Banco and Christian Dior
Assuming the 90 days horizon BBVA Banco Frances is expected to generate 2.33 times more return on investment than Christian Dior. However, BBVA Banco is 2.33 times more volatile than Christian Dior SE. It trades about 0.15 of its potential returns per unit of risk. Christian Dior SE is currently generating about 0.02 per unit of risk. If you would invest 1,230 in BBVA Banco Frances on September 26, 2024 and sell it today you would earn a total of 330.00 from holding BBVA Banco Frances or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BBVA Banco Frances vs. Christian Dior SE
Performance |
| Timeline |
| BBVA Banco Frances |
| Christian Dior SE |
BBVA Banco and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBVA Banco and Christian Dior
The main advantage of trading using opposite BBVA Banco and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBVA Banco position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior's long position.| BBVA Banco vs. POSBO UNSPADRS20YC1 | BBVA Banco vs. Postal Savings Bank | BBVA Banco vs. Truist Financial | BBVA Banco vs. OVERSEA CHINUNSPADR2 |
| Christian Dior vs. LVMH Mot Hennessy | Christian Dior vs. Herms International Socit | Christian Dior vs. CHRISTIAN DIOR ADR14EO2 | Christian Dior vs. The Swatch Group |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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