Correlation Between AMG Advanced and Banco Bilbao

Can any of the company-specific risk be diversified away by investing in both AMG Advanced 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 AMG Advanced and Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMG Advanced Metallurgical and Banco Bilbao Vizcaya, you can compare the effects of market volatilities on AMG Advanced 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 AMG Advanced with a short position of Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Banco Bilbao.

Diversification Opportunities for AMG Advanced and Banco Bilbao

0.0

Correlation Coefficient

AMG Advanced  Banco Bilbao

Pay attention - limited upside

The 3 months correlation between AMG and Banco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical 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 AMG Advanced 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 AMG Advanced Metallurgical 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 AMG Advanced i.e., AMG Advanced and Banco Bilbao go up and down completely randomly.

Pair Corralation between AMG Advanced and Banco Bilbao

If you would invest  1,343  in AMG Advanced Metallurgical on December 19, 2024 and sell it today you would earn a total of  441.00  from holding AMG Advanced Metallurgical or generate 32.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AMG Advanced Metallurgical  vs.  Banco Bilbao Vizcaya

AMG Advanced Metallu

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, AMG Advanced unveiled solid returns over the last few months and may actually be approaching a breakup point.

Banco Bilbao Vizcaya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Bilbao Vizcaya has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Banco Bilbao is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with AMG Advanced and Banco Bilbao

The main advantage of trading using opposite AMG Advanced and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced 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.

The idea behind AMG Advanced Metallurgical and Banco Bilbao Vizcaya pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.