Correlation Between JPMorgan Chase and Banco Bilbao

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Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase 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 JPMorgan Chase and Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and Banco Bilbao Viscaya, you can compare the effects of market volatilities on JPMorgan Chase 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 JPMorgan Chase with a short position of Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Banco Bilbao.

Diversification Opportunities for JPMorgan Chase and Banco Bilbao

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between JPMorgan and Banco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Banco Bilbao Viscaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bilbao Viscaya and JPMorgan Chase 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 JPMorgan Chase Co 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 Viscaya has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Banco Bilbao go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Banco Bilbao

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 4.38 times less return on investment than Banco Bilbao. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.33 times less risky than Banco Bilbao. It trades about 0.16 of its potential returns per unit of risk. Banco Bilbao Viscaya is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest  617.00  in Banco Bilbao Viscaya on November 4, 2022 and sell it today you would earn a total of  120.50  from holding Banco Bilbao Viscaya or generate 19.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

JPMorgan Chase Co  vs.  Banco Bilbao Viscaya

 Performance (%) 
       Timeline  
JPMorgan Chase 
JPMorgan Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in March 2023.

JPMorgan Price Channel

Banco Bilbao Viscaya 
Banco Performance
26 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bilbao Viscaya are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Banco Bilbao sustained solid returns over the last few months and may actually be approaching a breakup point.

Banco Price Channel

JPMorgan Chase and Banco Bilbao Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and Banco Bilbao

The main advantage of trading using opposite JPMorgan Chase and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase 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.
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The idea behind JPMorgan Chase Co and Banco Bilbao Viscaya 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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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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