Correlation Between BNP Paribas and INVITATION HOMES
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and INVITATION HOMES 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 INVITATION HOMES 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 INVITATION HOMES DL, you can compare the effects of market volatilities on BNP Paribas and INVITATION HOMES 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 INVITATION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and INVITATION HOMES.
Diversification Opportunities for BNP Paribas and INVITATION HOMES
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BNP and INVITATION is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and INVITATION HOMES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVITATION HOMES 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 INVITATION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVITATION HOMES has no effect on the direction of BNP Paribas i.e., BNP Paribas and INVITATION HOMES go up and down completely randomly.
Pair Corralation between BNP Paribas and INVITATION HOMES
Assuming the 90 days trading horizon BNP Paribas SA is expected to under-perform the INVITATION HOMES. But the stock apears to be less risky and, when comparing its historical volatility, BNP Paribas SA is 1.04 times less risky than INVITATION HOMES. The stock trades about -0.32 of its potential returns per unit of risk. The INVITATION HOMES DL is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 2,860 in INVITATION HOMES DL on September 1, 2024 and sell it today you would earn a total of 420.00 from holding INVITATION HOMES DL or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BNP Paribas SA vs. INVITATION HOMES DL
Performance |
| Timeline |
| BNP Paribas SA |
| INVITATION HOMES |
BNP Paribas and INVITATION HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and INVITATION HOMES
The main advantage of trading using opposite BNP Paribas and INVITATION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, INVITATION HOMES 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 INVITATION HOMES will offset losses from the drop in INVITATION HOMES's long position.| BNP Paribas vs. Hitachi Construction Machinery | BNP Paribas vs. INVITATION HOMES DL | BNP Paribas vs. Tri Pointe Homes | BNP Paribas vs. Granite Construction |
| INVITATION HOMES vs. UDR Inc | INVITATION HOMES vs. Superior Plus Corp | INVITATION HOMES vs. Origin Agritech | INVITATION HOMES vs. Identiv |
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.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance |