Correlation Between BNP Paribas and Clean Carbon
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Clean Carbon 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 Clean Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas Bank and Clean Carbon Energy, you can compare the effects of market volatilities on BNP Paribas and Clean Carbon 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 Clean Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Clean Carbon.
Diversification Opportunities for BNP Paribas and Clean Carbon
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BNP and Clean is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and Clean Carbon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Carbon Energy 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 Bank are associated (or correlated) with Clean Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Carbon Energy has no effect on the direction of BNP Paribas i.e., BNP Paribas and Clean Carbon go up and down completely randomly.
Pair Corralation between BNP Paribas and Clean Carbon
Assuming the 90 days trading horizon BNP Paribas is expected to generate 9.69 times less return on investment than Clean Carbon. But when comparing it to its historical volatility, BNP Paribas Bank is 3.13 times less risky than Clean Carbon. It trades about 0.01 of its potential returns per unit of risk. Clean Carbon Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Clean Carbon Energy on November 5, 2024 and sell it today you would lose (5.00) from holding Clean Carbon Energy or give up 15.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
BNP Paribas Bank vs. Clean Carbon Energy
Performance |
| Timeline |
| BNP Paribas Bank |
| Clean Carbon Energy |
BNP Paribas and Clean Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Clean Carbon
The main advantage of trading using opposite BNP Paribas and Clean Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Clean Carbon 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 Clean Carbon will offset losses from the drop in Clean Carbon's long position.| BNP Paribas vs. Santander Bank Polska | BNP Paribas vs. Bank Polska Kasa | BNP Paribas vs. ING Bank lski | BNP Paribas vs. mBank SA |
| Clean Carbon vs. Drago entertainment SA | Clean Carbon vs. Mercator Medical SA | Clean Carbon vs. Quantum Software SA | Clean Carbon vs. Immobile |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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