Correlation Between BNP Paribas and Groupimo
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Groupimo 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 BNP Paribas and Groupimo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas SA and Groupimo SA, you can compare the effects of market volatilities on BNP Paribas and Groupimo 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 BNP Paribas with a short position of Groupimo. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Groupimo.
Diversification Opportunities for BNP Paribas and Groupimo
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between BNP and Groupimo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Groupimo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupimo SA and BNP Paribas 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 BNP Paribas SA are associated (or correlated) with Groupimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupimo SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and Groupimo go up and down completely randomly.
Pair Corralation between BNP Paribas and Groupimo
Assuming the 90 days trading horizon BNP Paribas SA is expected to generate 1.38 times more return on investment than Groupimo. However, BNP Paribas is 1.38 times more volatile than Groupimo SA. It trades about 0.35 of its potential returns per unit of risk. Groupimo SA is currently generating about -0.22 per unit of risk. If you would invest 6,423 in BNP Paribas SA on November 27, 2024 and sell it today you would earn a total of 685.00 from holding BNP Paribas SA or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Groupimo SA
Performance |
| Timeline |
| BNP Paribas SA |
| Groupimo SA |
BNP Paribas and Groupimo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Groupimo
The main advantage of trading using opposite BNP Paribas and Groupimo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Groupimo 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 Groupimo will offset losses from the drop in Groupimo's long position.| BNP Paribas vs. Societe Generale SA | BNP Paribas vs. Credit Agricole SA | BNP Paribas vs. AXA SA | BNP Paribas vs. Sanofi SA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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