Correlation Between BNP Paribas and KCI SA
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and KCI SA 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 KCI SA 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 KCI SA, you can compare the effects of market volatilities on BNP Paribas and KCI SA 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 KCI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and KCI SA.
Diversification Opportunities for BNP Paribas and KCI SA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNP and KCI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and KCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCI 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 KCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCI SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and KCI SA go up and down completely randomly.
Pair Corralation between BNP Paribas and KCI SA
Assuming the 90 days trading horizon BNP Paribas Bank is expected to generate 0.77 times more return on investment than KCI SA. However, BNP Paribas Bank is 1.3 times less risky than KCI SA. It trades about 0.05 of its potential returns per unit of risk. KCI SA is currently generating about 0.01 per unit of risk. If you would invest 5,627 in BNP Paribas Bank on September 3, 2024 and sell it today you would earn a total of 2,553 from holding BNP Paribas Bank or generate 45.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas Bank vs. KCI SA
Performance |
| Timeline |
| BNP Paribas Bank |
| KCI SA |
BNP Paribas and KCI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and KCI SA
The main advantage of trading using opposite BNP Paribas and KCI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, KCI SA 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 KCI SA will offset losses from the drop in KCI SA'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 |
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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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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