Correlation Between Banco Bilbao and DoubleVerify Holdings

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

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

Diversification Opportunities for Banco Bilbao and DoubleVerify Holdings

-0.69

Correlation Coefficient

Banco Bilbao  DoubleVerify Holdings

Excellent diversification

The 3 months correlation between Banco and DoubleVerify is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bilbao Viscaya and DoubleVerify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleVerify Holdings and Banco Bilbao 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 Banco Bilbao Viscaya are associated (or correlated) with DoubleVerify Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleVerify Holdings has no effect on the direction of Banco Bilbao i.e., Banco Bilbao and DoubleVerify Holdings go up and down completely randomly.

Pair Corralation between Banco Bilbao and DoubleVerify Holdings

Given the investment horizon of 90 days Banco Bilbao Viscaya is expected to generate 1.11 times more return on investment than DoubleVerify Holdings. However, Banco Bilbao is 1.11 times more volatile than DoubleVerify Holdings. It trades about 0.06 of its potential returns per unit of risk. DoubleVerify Holdings is currently generating about -0.05 per unit of risk. If you would invest  1,047  in Banco Bilbao Viscaya on February 8, 2024 and sell it today you would earn a total of  47.00  from holding Banco Bilbao Viscaya or generate 4.49% return on investment over 90 days.

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

Banco Bilbao Viscaya  vs.  DoubleVerify Holdings

Banco Bilbao Viscaya

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bilbao Viscaya are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Banco Bilbao sustained solid returns over the last few months and may actually be approaching a breakup point.

DoubleVerify Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DoubleVerify Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Banco Bilbao and DoubleVerify Holdings

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

The idea behind Banco Bilbao Viscaya and DoubleVerify Holdings 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.