Correlation Between Svenska Handelsbanken and Banco Bilbao
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken 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 Svenska Handelsbanken and Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken PK and Banco Bilbao Vizcaya, you can compare the effects of market volatilities on Svenska Handelsbanken 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 Svenska Handelsbanken with a short position of Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Banco Bilbao.
Diversification Opportunities for Svenska Handelsbanken and Banco Bilbao
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Svenska and Banco is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken PK 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 Svenska Handelsbanken 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 Svenska Handelsbanken PK 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 Svenska Handelsbanken i.e., Svenska Handelsbanken and Banco Bilbao go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Banco Bilbao
Assuming the 90 days horizon Svenska Handelsbanken is expected to generate 3.67 times less return on investment than Banco Bilbao. But when comparing it to its historical volatility, Svenska Handelsbanken PK is 2.51 times less risky than Banco Bilbao. It trades about 0.03 of its potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 582.00 in Banco Bilbao Vizcaya on August 27, 2024 and sell it today you would earn a total of 332.00 from holding Banco Bilbao Vizcaya or generate 57.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.44% |
| Values | Daily Returns |
Svenska Handelsbanken PK vs. Banco Bilbao Vizcaya
Performance |
| Timeline |
| Svenska Handelsbanken |
| Banco Bilbao Vizcaya |
Svenska Handelsbanken and Banco Bilbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and Banco Bilbao
The main advantage of trading using opposite Svenska Handelsbanken and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken 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.| Svenska Handelsbanken vs. China Construction Bank | Svenska Handelsbanken vs. Industrial and Commercial | Svenska Handelsbanken vs. Bank of America | Svenska Handelsbanken vs. Bank of America |
| Banco Bilbao vs. ANZ Group Holdings | Banco Bilbao vs. Agricultural Bank | Banco Bilbao vs. Industrial and Commercial | Banco Bilbao vs. Bank of America |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |