Correlation Between Japan Post and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Japan Post and BNP Paribas 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 Japan Post and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Post Insurance and BNP Paribas SA, you can compare the effects of market volatilities on Japan Post and BNP Paribas 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 Japan Post with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and BNP Paribas.
Diversification Opportunities for Japan Post and BNP Paribas
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and BNP is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Insurance and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and Japan Post 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 Japan Post Insurance are associated (or correlated) with BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of Japan Post i.e., Japan Post and BNP Paribas go up and down completely randomly.
Pair Corralation between Japan Post and BNP Paribas
Assuming the 90 days trading horizon Japan Post is expected to generate 1.13 times less return on investment than BNP Paribas. In addition to that, Japan Post is 1.14 times more volatile than BNP Paribas SA. It trades about 0.02 of its total potential returns per unit of risk. BNP Paribas SA is currently generating about 0.02 per unit of volatility. If you would invest 5,346 in BNP Paribas SA on October 16, 2024 and sell it today you would earn a total of 621.00 from holding BNP Paribas SA or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Post Insurance vs. BNP Paribas SA
Performance |
| Timeline |
| Japan Post Insurance |
| BNP Paribas SA |
Japan Post and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and BNP Paribas
The main advantage of trading using opposite Japan Post and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| Japan Post vs. Sunny Optical Technology | Japan Post vs. TRI CHEMICAL LABORATINC | Japan Post vs. Easy Software AG | Japan Post vs. Siamgas And Petrochemicals |
| BNP Paribas vs. UNIQA INSURANCE GR | BNP Paribas vs. VULCAN MATERIALS | BNP Paribas vs. Japan Post Insurance | BNP Paribas vs. Universal Insurance Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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