Correlation Between Agricultural Bank and Banco Bilbao
Can any of the company-specific risk be diversified away by investing in both Agricultural Bank 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 Agricultural Bank and Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agricultural Bank of and Banco Bilbao Vizcaya, you can compare the effects of market volatilities on Agricultural Bank 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 Agricultural Bank with a short position of Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Banco Bilbao.
Diversification Opportunities for Agricultural Bank and Banco Bilbao
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Agricultural and Banco is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Banco Bilbao Vizcaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bilbao Vizcaya and Agricultural Bank 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 Agricultural Bank of 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 Vizcaya has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Banco Bilbao go up and down completely randomly.
Pair Corralation between Agricultural Bank and Banco Bilbao
Assuming the 90 days horizon Agricultural Bank of is expected to generate 2.21 times more return on investment than Banco Bilbao. However, Agricultural Bank is 2.21 times more volatile than Banco Bilbao Vizcaya. It trades about 0.12 of its potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about -0.08 per unit of risk. If you would invest 41.00 in Agricultural Bank of on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Agricultural Bank of or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. Banco Bilbao Vizcaya
Performance |
| Timeline |
| Agricultural Bank |
| Banco Bilbao Vizcaya |
Agricultural Bank and Banco Bilbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Banco Bilbao
The main advantage of trading using opposite Agricultural Bank and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank 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.| Agricultural Bank vs. Bank of China | Agricultural Bank vs. Superior Plus Corp | Agricultural Bank vs. NMI Holdings | Agricultural Bank vs. Origin Agritech |
| Banco Bilbao vs. Bank of China | Banco Bilbao vs. Superior Plus Corp | Banco Bilbao vs. NMI Holdings | Banco Bilbao vs. Origin Agritech |
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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