Correlation Between Urbas Grupo and Banco Bilbao

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

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

Diversification Opportunities for Urbas Grupo and Banco Bilbao

-0.9

Correlation Coefficient

Urbas Grupo  Banco Bilbao

Pay attention - limited upside

The 3 months correlation between Urbas and Banco is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Urbas Grupo Financiero 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 Urbas Grupo 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 Urbas Grupo Financiero 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 Urbas Grupo i.e., Urbas Grupo and Banco Bilbao go up and down completely randomly.

Pair Corralation between Urbas Grupo and Banco Bilbao

Assuming the 90 days trading horizon Urbas Grupo Financiero is expected to under-perform the Banco Bilbao. In addition to that, Urbas Grupo is 2.06 times more volatile than Banco Bilbao Vizcaya. It trades about -0.04 of its total potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about 0.24 per unit of volatility. If you would invest  737.00  in Banco Bilbao Vizcaya on January 30, 2024 and sell it today you would earn a total of  362.00  from holding Banco Bilbao Vizcaya or generate 49.12% return on investment over 90 days.

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

Urbas Grupo Financiero  vs.  Banco Bilbao Vizcaya

Urbas Grupo Financiero

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Urbas Grupo Financiero has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Banco Bilbao Vizcaya

Risk-Adjusted Performance

24 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bilbao Vizcaya are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Banco Bilbao exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Urbas Grupo and Banco Bilbao

The main advantage of trading using opposite Urbas Grupo and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urbas Grupo 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 Urbas Grupo Financiero 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.