Correlation Between BBVA Banco and VIVENDI UNSPONARD

Can any of the company-specific risk be diversified away by investing in both BBVA Banco and VIVENDI UNSPONARD 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 VIVENDI UNSPONARD 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 VIVENDI UNSPONARD EO, you can compare the effects of market volatilities on BBVA Banco and VIVENDI UNSPONARD 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 VIVENDI UNSPONARD. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Banco and VIVENDI UNSPONARD.

Diversification Opportunities for BBVA Banco and VIVENDI UNSPONARD

-0.92

Correlation Coefficient

BBVA Banco  VIVENDI UNSPONARD

Pay attention - limited upside

The 3 months correlation between BBVA and VIVENDI is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Banco Frances and VIVENDI UNSPONARD EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVENDI UNSPONARD 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 VIVENDI UNSPONARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVENDI UNSPONARD has no effect on the direction of BBVA Banco i.e., BBVA Banco and VIVENDI UNSPONARD go up and down completely randomly.

Pair Corralation between BBVA Banco and VIVENDI UNSPONARD

Assuming the 90 days horizon BBVA Banco Frances is expected to generate 2.98 times more return on investment than VIVENDI UNSPONARD. However, BBVA Banco is 2.98 times more volatile than VIVENDI UNSPONARD EO. It trades about 0.2 of its potential returns per unit of risk. VIVENDI UNSPONARD EO is currently generating about -0.18 per unit of risk. If you would invest  995.00  in BBVA Banco Frances on September 5, 2024 and sell it today you would earn a total of  635.00  from holding BBVA Banco Frances or generate 63.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

BBVA Banco Frances  vs.  VIVENDI UNSPONARD EO

BBVA Banco Frances

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BBVA Banco Frances are ranked lower than 15 (%) 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.

VIVENDI UNSPONARD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIVENDI UNSPONARD EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BBVA Banco and VIVENDI UNSPONARD

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

The idea behind BBVA Banco Frances and VIVENDI UNSPONARD 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 Commodity Directory module to find actively traded commodities issued by global exchanges.