Correlation Between JPMorgan Chase and Banco Bilbao

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

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

Diversification Opportunities for JPMorgan Chase and Banco Bilbao

-0.1

Correlation Coefficient

JPMorgan Chase  Banco Bilbao

Good diversification

The 3 months correlation between JPMorgan and Banco is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co 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 JPMorgan Chase 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 JPMorgan Chase Co 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 JPMorgan Chase i.e., JPMorgan Chase and Banco Bilbao go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Banco Bilbao

Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 23.77 times less return on investment than Banco Bilbao. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.28 times less risky than Banco Bilbao. It trades about 0.01 of its potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  20,005  in Banco Bilbao Vizcaya on December 30, 2024 and sell it today you would earn a total of  8,051  from holding Banco Bilbao Vizcaya or generate 40.24% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Banco Bilbao Vizcaya

JPMorgan Chase

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, JPMorgan Chase is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Banco Bilbao Vizcaya

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bilbao Vizcaya are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Banco Bilbao showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Banco Bilbao

The main advantage of trading using opposite JPMorgan Chase and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase 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 JPMorgan Chase Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.