Correlation Between Bank of Montreal and Banco Bilbao
Can any of the company-specific risk be diversified away by investing in both Bank of Montreal 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 Bank of Montreal and Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Montreal and Banco Bilbao Viscaya, you can compare the effects of market volatilities on Bank of Montreal 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 Bank of Montreal with a short position of Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Montreal and Banco Bilbao.
Diversification Opportunities for Bank of Montreal and Banco Bilbao
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Banco is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal 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 Bank of Montreal 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 Bank of Montreal 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 Bank of Montreal i.e., Bank of Montreal and Banco Bilbao go up and down completely randomly.
Pair Corralation between Bank of Montreal and Banco Bilbao
Considering the 90-day investment horizon Bank of Montreal is expected to generate 0.8 times more return on investment than Banco Bilbao. However, Bank of Montreal is 1.26 times less risky than Banco Bilbao. It trades about 0.23 of its potential returns per unit of risk. Banco Bilbao Viscaya is currently generating about 0.08 per unit of risk. If you would invest 9,409 in Bank of Montreal on September 12, 2024 and sell it today you would earn a total of 665.00 from holding Bank of Montreal or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Montreal vs. Banco Bilbao Viscaya
Performance |
| Timeline |
| Bank of Montreal |
| Banco Bilbao Viscaya |
Bank of Montreal and Banco Bilbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Montreal and Banco Bilbao
The main advantage of trading using opposite Bank of Montreal and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Montreal 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.| Bank of Montreal vs. Bank of America | Bank of Montreal vs. Victory Integrity Smallmid Cap | Bank of Montreal vs. Hilton Worldwide Holdings | Bank of Montreal vs. NVIDIA |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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