Correlation Between Banco Bilbao and Bankinter

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

Diversification Opportunities for Banco Bilbao and Bankinter

0.8

Correlation Coefficient

Banco Bilbao  Bankinter

Very poor diversification

The 3 months correlation between Banco and Bankinter is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bilbao Vizcaya and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter 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 Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter has no effect on the direction of Banco Bilbao i.e., Banco Bilbao and Bankinter go up and down completely randomly.

Pair Corralation between Banco Bilbao and Bankinter

Assuming the 90 days trading horizon Banco Bilbao is expected to generate 3.79 times less return on investment than Bankinter. In addition to that, Banco Bilbao is 1.17 times more volatile than Bankinter. It trades about 0.04 of its total potential returns per unit of risk. Bankinter is currently generating about 0.18 per unit of volatility. If you would invest  1,012  in Bankinter on April 25, 2025 and sell it today you would earn a total of  148.00  from holding Bankinter or generate 14.62% return on investment over 90 days.

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

Banco Bilbao Vizcaya  vs.  Bankinter

Banco Bilbao Vizcaya

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bilbao Vizcaya are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Banco Bilbao is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bankinter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bankinter are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bankinter exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banco Bilbao and Bankinter

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

The idea behind Banco Bilbao Vizcaya and Bankinter 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.