Correlation Between Superior Plus and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and BNP Paribas SA, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and BNP Paribas.
Diversification Opportunities for Superior Plus and BNP Paribas
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Superior and BNP is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and BNP Paribas go up and down completely randomly.
Pair Corralation between Superior Plus and BNP Paribas
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the BNP Paribas. In addition to that, Superior Plus is 1.8 times more volatile than BNP Paribas SA. It trades about -0.07 of its total potential returns per unit of risk. BNP Paribas SA is currently generating about -0.07 per unit of volatility. If you would invest 6,621 in BNP Paribas SA on September 3, 2024 and sell it today you would lose (954.00) from holding BNP Paribas SA or give up 14.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. BNP Paribas SA
Performance |
| Timeline |
| Superior Plus Corp |
| BNP Paribas SA |
Superior Plus and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and BNP Paribas
The main advantage of trading using opposite Superior Plus and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Collins Foods Limited | Superior Plus vs. Thai Beverage Public | Superior Plus vs. ADRIATIC METALS LS 013355 | Superior Plus vs. Lifeway Foods |
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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 the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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