Correlation Between BNP Paribas and Carrefour
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Carrefour 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 Carrefour 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 Carrefour SA, you can compare the effects of market volatilities on BNP Paribas and Carrefour 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 Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Carrefour.
Diversification Opportunities for BNP Paribas and Carrefour
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BNP and Carrefour is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour 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 Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and Carrefour go up and down completely randomly.
Pair Corralation between BNP Paribas and Carrefour
Assuming the 90 days trading horizon BNP Paribas SA is expected to generate 1.11 times more return on investment than Carrefour. However, BNP Paribas is 1.11 times more volatile than Carrefour SA. It trades about 0.02 of its potential returns per unit of risk. Carrefour SA is currently generating about -0.01 per unit of risk. If you would invest 5,341 in BNP Paribas SA on August 31, 2024 and sell it today you would earn a total of 323.00 from holding BNP Paribas SA or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Carrefour SA
Performance |
| Timeline |
| BNP Paribas SA |
| Carrefour SA |
BNP Paribas and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Carrefour
The main advantage of trading using opposite BNP Paribas and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour'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 |
| Carrefour vs. Danone SA | Carrefour vs. Renault SA | Carrefour vs. AXA SA | Carrefour vs. Compagnie de Saint Gobain |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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