Correlation Between Banco Bilbao and Pacific Funds

Can any of the company-specific risk be diversified away by investing in both Banco Bilbao and Pacific Funds 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 Pacific Funds 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 Pacific Funds Floating, you can compare the effects of market volatilities on Banco Bilbao and Pacific Funds 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bilbao and Pacific Funds.

Diversification Opportunities for Banco Bilbao and Pacific Funds

0.0

Correlation Coefficient

Banco Bilbao  Pacific Funds

Pay attention - limited upside

The 3 months correlation between Banco and Pacific is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bilbao Viscaya and Pacific Funds Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Floating 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Floating has no effect on the direction of Banco Bilbao i.e., Banco Bilbao and Pacific Funds go up and down completely randomly.

Pair Corralation between Banco Bilbao and Pacific Funds

If you would invest (100.00) in Pacific Funds Floating on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Pacific Funds Floating or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Banco Bilbao Viscaya  vs.  Pacific Funds Floating

Banco Bilbao Viscaya

Risk-Adjusted Performance

21 of 100

Solid

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

Pacific Funds Floating

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Pacific Funds Floating has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Pacific Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banco Bilbao and Pacific Funds

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

The idea behind Banco Bilbao Viscaya and Pacific Funds Floating 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.