Correlation Between BNP Paribas and CFI Holding
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and CFI Holding 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 CFI Holding 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 CFI Holding SA, you can compare the effects of market volatilities on BNP Paribas and CFI Holding 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 CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and CFI Holding.
Diversification Opportunities for BNP Paribas and CFI Holding
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNP and CFI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and CFI Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFI Holding 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 Bank are associated (or correlated) with CFI Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFI Holding SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and CFI Holding go up and down completely randomly.
Pair Corralation between BNP Paribas and CFI Holding
Assuming the 90 days trading horizon BNP Paribas Bank is expected to generate 0.25 times more return on investment than CFI Holding. However, BNP Paribas Bank is 3.94 times less risky than CFI Holding. It trades about -0.22 of its potential returns per unit of risk. CFI Holding SA is currently generating about -0.08 per unit of risk. If you would invest 8,860 in BNP Paribas Bank on September 3, 2024 and sell it today you would lose (680.00) from holding BNP Paribas Bank or give up 7.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Bank vs. CFI Holding SA
Performance |
| Timeline |
| BNP Paribas Bank |
| CFI Holding SA |
BNP Paribas and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and CFI Holding
The main advantage of trading using opposite BNP Paribas and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, CFI Holding 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 CFI Holding will offset losses from the drop in CFI Holding's long position.| BNP Paribas vs. UniCredit SpA | BNP Paribas vs. Santander Bank Polska | BNP Paribas vs. Bank Polska Kasa | BNP Paribas vs. Bank Handlowy w |
| CFI Holding vs. Medicalg | CFI Holding vs. Igoria Trade SA | CFI Holding vs. Santander Bank Polska | CFI Holding vs. Movie Games 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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