Correlation Between Matba Rofex and BBVA Banco
Can any of the company-specific risk be diversified away by investing in both Matba Rofex 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 Matba Rofex and BBVA Banco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matba Rofex SA and BBVA Banco Frances, you can compare the effects of market volatilities on Matba Rofex 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 Matba Rofex with a short position of BBVA Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matba Rofex and BBVA Banco.
Diversification Opportunities for Matba Rofex and BBVA Banco
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matba and BBVA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Matba Rofex SA 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 Matba Rofex 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 Matba Rofex SA 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 Matba Rofex i.e., Matba Rofex and BBVA Banco go up and down completely randomly.
Pair Corralation between Matba Rofex and BBVA Banco
Assuming the 90 days trading horizon Matba Rofex SA is expected to under-perform the BBVA Banco. But the stock apears to be less risky and, when comparing its historical volatility, Matba Rofex SA is 2.25 times less risky than BBVA Banco. The stock trades about -0.3 of its potential returns per unit of risk. The BBVA Banco Frances is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 667,000 in BBVA Banco Frances on October 20, 2024 and sell it today you would earn a total of 196,000 from holding BBVA Banco Frances or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Matba Rofex SA vs. BBVA Banco Frances
Performance |
| Timeline |
| Matba Rofex SA |
| BBVA Banco Frances |
Matba Rofex and BBVA Banco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matba Rofex and BBVA Banco
The main advantage of trading using opposite Matba Rofex and BBVA Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matba Rofex 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.| Matba Rofex vs. Compania de Transporte | Matba Rofex vs. Agrometal SAI | Matba Rofex vs. Harmony Gold Mining |
| BBVA Banco vs. American Express Co | BBVA Banco vs. QUALCOMM Incorporated | BBVA Banco vs. United States Steel | BBVA Banco vs. Pfizer Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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