Correlation Between Svenska Handelsbanken and Banco Bilbao
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken 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 Svenska Handelsbanken and Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken PK and Banco Bilbao Vizcaya, you can compare the effects of market volatilities on Svenska Handelsbanken 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 Svenska Handelsbanken with a short position of Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and Banco Bilbao.
Diversification Opportunities for Svenska Handelsbanken and Banco Bilbao
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Svenska and Banco is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken PK 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 Svenska Handelsbanken 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 Svenska Handelsbanken PK 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 Svenska Handelsbanken i.e., Svenska Handelsbanken and Banco Bilbao go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and Banco Bilbao
Assuming the 90 days horizon Svenska Handelsbanken PK is expected to generate 0.61 times more return on investment than Banco Bilbao. However, Svenska Handelsbanken PK is 1.63 times less risky than Banco Bilbao. It trades about 0.05 of its potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about -0.05 per unit of risk. If you would invest 507.00 in Svenska Handelsbanken PK on September 6, 2024 and sell it today you would earn a total of 23.00 from holding Svenska Handelsbanken PK or generate 4.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Svenska Handelsbanken PK vs. Banco Bilbao Vizcaya
Performance |
Timeline |
Svenska Handelsbanken |
Banco Bilbao Vizcaya |
Svenska Handelsbanken and Banco Bilbao Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Svenska Handelsbanken and Banco Bilbao
The main advantage of trading using opposite Svenska Handelsbanken and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken 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.Svenska Handelsbanken vs. China Construction Bank | Svenska Handelsbanken vs. Industrial and Commercial | Svenska Handelsbanken vs. Bank of America | Svenska Handelsbanken vs. Bank of America |
Banco Bilbao vs. Bank of America | Banco Bilbao vs. Barclays PLC | Banco Bilbao vs. Bank of America | Banco Bilbao vs. ABN AMRO Bank |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |