Correlation Between BBVA Banco and KERINGUNSPADR 110

Can any of the company-specific risk be diversified away by investing in both BBVA Banco and KERINGUNSPADR 110 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 BBVA Banco and KERINGUNSPADR 110 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BBVA Banco Frances and KERINGUNSPADR 110 EO, you can compare the effects of market volatilities on BBVA Banco and KERINGUNSPADR 110 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 BBVA Banco with a short position of KERINGUNSPADR 110. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Banco and KERINGUNSPADR 110.

Diversification Opportunities for BBVA Banco and KERINGUNSPADR 110

-0.43

Correlation Coefficient

BBVA Banco  KERINGUNSPADR 110

Very good diversification

The 3 months correlation between BBVA and KERINGUNSPADR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Banco Frances and KERINGUNSPADR 110 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KERINGUNSPADR 110 and BBVA Banco 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 BBVA Banco Frances are associated (or correlated) with KERINGUNSPADR 110. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KERINGUNSPADR 110 has no effect on the direction of BBVA Banco i.e., BBVA Banco and KERINGUNSPADR 110 go up and down completely randomly.

Pair Corralation between BBVA Banco and KERINGUNSPADR 110

Assuming the 90 days horizon BBVA Banco Frances is expected to generate 1.73 times more return on investment than KERINGUNSPADR 110. However, BBVA Banco is 1.73 times more volatile than KERINGUNSPADR 110 EO. It trades about 0.22 of its potential returns per unit of risk. KERINGUNSPADR 110 EO is currently generating about 0.0 per unit of risk. If you would invest  1,030  in BBVA Banco Frances on September 23, 2024 and sell it today you would earn a total of  530.00  from holding BBVA Banco Frances or generate 51.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BBVA Banco Frances  vs.  KERINGUNSPADR 110 EO

BBVA Banco Frances

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BBVA Banco Frances are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BBVA Banco reported solid returns over the last few months and may actually be approaching a breakup point.

KERINGUNSPADR 110

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KERINGUNSPADR 110 EO are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KERINGUNSPADR 110 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BBVA Banco and KERINGUNSPADR 110

The main advantage of trading using opposite BBVA Banco and KERINGUNSPADR 110 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBVA Banco position performs unexpectedly, KERINGUNSPADR 110 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 KERINGUNSPADR 110 will offset losses from the drop in KERINGUNSPADR 110's long position.

The idea behind BBVA Banco Frances and KERINGUNSPADR 110 EO 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .