Correlation Between BNP Paribas and Bank Millennium
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Bank Millennium 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 Bank Millennium 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 Bank Millennium SA, you can compare the effects of market volatilities on BNP Paribas and Bank Millennium 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 Bank Millennium. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Bank Millennium.
Diversification Opportunities for BNP Paribas and Bank Millennium
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BNP and Bank is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium 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 Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and Bank Millennium go up and down completely randomly.
Pair Corralation between BNP Paribas and Bank Millennium
Assuming the 90 days trading horizon BNP Paribas is expected to generate 1.57 times less return on investment than Bank Millennium. But when comparing it to its historical volatility, BNP Paribas Bank is 1.24 times less risky than Bank Millennium. It trades about 0.05 of its potential returns per unit of risk. Bank Millennium SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 470.00 in Bank Millennium SA on September 12, 2024 and sell it today you would earn a total of 418.00 from holding Bank Millennium SA or generate 88.94% 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 Bank vs. Bank Millennium SA
Performance |
| Timeline |
| BNP Paribas Bank |
| Bank Millennium SA |
BNP Paribas and Bank Millennium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Bank Millennium
The main advantage of trading using opposite BNP Paribas and Bank Millennium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Bank Millennium 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 Bank Millennium will offset losses from the drop in Bank Millennium's long position.| BNP Paribas vs. UniCredit SpA | BNP Paribas vs. Santander Bank Polska | BNP Paribas vs. Bank Polska Kasa | BNP Paribas vs. ING Bank lski |
| Bank Millennium vs. UniCredit SpA | Bank Millennium vs. Santander Bank Polska | Bank Millennium vs. Bank Polska Kasa | Bank Millennium vs. ING Bank lski |
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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