Correlation Between Caseys General and BBVA Banco
Can any of the company-specific risk be diversified away by investing in both Caseys General and BBVA Banco 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 Caseys General and BBVA Banco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and BBVA Banco Frances, you can compare the effects of market volatilities on Caseys General and BBVA Banco 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 Caseys General with a short position of BBVA Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and BBVA Banco.
Diversification Opportunities for Caseys General and BBVA Banco
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caseys and BBVA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and BBVA Banco Frances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBVA Banco Frances and Caseys General 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 Caseys General Stores are associated (or correlated) with BBVA Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBVA Banco Frances has no effect on the direction of Caseys General i.e., Caseys General and BBVA Banco go up and down completely randomly.
Pair Corralation between Caseys General and BBVA Banco
Assuming the 90 days trading horizon Caseys General is expected to generate 3.06 times less return on investment than BBVA Banco. But when comparing it to its historical volatility, Caseys General Stores is 2.68 times less risky than BBVA Banco. It trades about 0.11 of its potential returns per unit of risk. BBVA Banco Frances is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 351.00 in BBVA Banco Frances on September 12, 2024 and sell it today you would earn a total of 1,239 from holding BBVA Banco Frances or generate 352.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. BBVA Banco Frances
Performance |
| Timeline |
| Caseys General Stores |
| BBVA Banco Frances |
Caseys General and BBVA Banco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and BBVA Banco
The main advantage of trading using opposite Caseys General and BBVA Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, BBVA Banco 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 BBVA Banco will offset losses from the drop in BBVA Banco's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| BBVA Banco vs. SHIP HEALTHCARE HLDGINC | BBVA Banco vs. RETAIL FOOD GROUP | BBVA Banco vs. Fast Retailing Co | BBVA Banco vs. Caseys General Stores |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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