Correlation Between BNP Paribas and Centrale DAchat
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Centrale DAchat 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 Centrale DAchat 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 Centrale dAchat Franaise, you can compare the effects of market volatilities on BNP Paribas and Centrale DAchat 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 Centrale DAchat. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Centrale DAchat.
Diversification Opportunities for BNP Paribas and Centrale DAchat
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNP and Centrale is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Centrale dAchat Franaise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrale dAchat Franaise 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 Centrale DAchat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrale dAchat Franaise has no effect on the direction of BNP Paribas i.e., BNP Paribas and Centrale DAchat go up and down completely randomly.
Pair Corralation between BNP Paribas and Centrale DAchat
Assuming the 90 days trading horizon BNP Paribas SA is expected to generate 0.98 times more return on investment than Centrale DAchat. However, BNP Paribas SA is 1.02 times less risky than Centrale DAchat. It trades about 0.01 of its potential returns per unit of risk. Centrale dAchat Franaise is currently generating about -0.05 per unit of risk. If you would invest 6,282 in BNP Paribas SA on October 24, 2024 and sell it today you would earn a total of 29.00 from holding BNP Paribas SA or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Centrale dAchat Franaise
Performance |
| Timeline |
| BNP Paribas SA |
| Centrale dAchat Franaise |
BNP Paribas and Centrale DAchat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Centrale DAchat
The main advantage of trading using opposite BNP Paribas and Centrale DAchat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Centrale DAchat 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 Centrale DAchat will offset losses from the drop in Centrale DAchat'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 |
| Centrale DAchat vs. Vente Unique | Centrale DAchat vs. Groupe Sfpi | Centrale DAchat vs. Cegedim SA | Centrale DAchat vs. SA Catana Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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