Correlation Between BBVA Banco and Apple
Can any of the company-specific risk be diversified away by investing in both BBVA Banco and Apple 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 Apple 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 Apple Inc DRC, you can compare the effects of market volatilities on BBVA Banco and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Banco and Apple.
Diversification Opportunities for BBVA Banco and Apple
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BBVA and Apple is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Banco Frances and Apple Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc DRC 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc DRC has no effect on the direction of BBVA Banco i.e., BBVA Banco and Apple go up and down completely randomly.
Pair Corralation between BBVA Banco and Apple
Assuming the 90 days trading horizon BBVA Banco Frances is expected to generate 10.19 times more return on investment than Apple. However, BBVA Banco is 10.19 times more volatile than Apple Inc DRC. It trades about 0.08 of its potential returns per unit of risk. Apple Inc DRC is currently generating about 0.09 per unit of risk. If you would invest 17,960 in BBVA Banco Frances on February 4, 2024 and sell it today you would earn a total of 375,425 from holding BBVA Banco Frances or generate 2090.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.78% |
Values | Daily Returns |
BBVA Banco Frances vs. Apple Inc DRC
Performance |
Timeline |
BBVA Banco Frances |
Apple Inc DRC |
BBVA Banco and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BBVA Banco and Apple
The main advantage of trading using opposite BBVA Banco and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBVA Banco position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.BBVA Banco vs. Agrometal SAI | BBVA Banco vs. Telecom Argentina | BBVA Banco vs. Harmony Gold Mining | BBVA Banco vs. Transportadora de Gas |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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