Correlation Between Banco Bilbao and ANZ Group

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

By analyzing existing cross correlation between Banco Bilbao Vizcaya and ANZ Group Holdings, you can compare the effects of market volatilities on Banco Bilbao and ANZ Group 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 ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bilbao and ANZ Group.

Diversification Opportunities for Banco Bilbao and ANZ Group

-0.16

Correlation Coefficient

Banco Bilbao  ANZ Group

Good diversification

The 3 months correlation between Banco and ANZ is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bilbao Vizcaya and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group 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 Vizcaya are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Banco Bilbao i.e., Banco Bilbao and ANZ Group go up and down completely randomly.

Pair Corralation between Banco Bilbao and ANZ Group

If you would invest  963.00  in Banco Bilbao Vizcaya on August 9, 2024 and sell it today you would earn a total of  137.00  from holding Banco Bilbao Vizcaya or generate 14.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Banco Bilbao Vizcaya  vs.  ANZ Group Holdings

Banco Bilbao Vizcaya

Risk-Adjusted Performance

8 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bilbao Vizcaya are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Banco Bilbao reported solid returns over the last few months and may actually be approaching a breakup point.

ANZ Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, ANZ Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Banco Bilbao and ANZ Group

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

The idea behind Banco Bilbao Vizcaya and ANZ Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.