Correlation Between BNP Paribas and Superior Plus
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on BNP Paribas and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Superior Plus.
Diversification Opportunities for BNP Paribas and Superior Plus
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BNP and Superior is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of BNP Paribas i.e., BNP Paribas and Superior Plus go up and down completely randomly.
Pair Corralation between BNP Paribas and Superior Plus
Assuming the 90 days trading horizon BNP Paribas SA is expected to generate 0.42 times more return on investment than Superior Plus. However, BNP Paribas SA is 2.35 times less risky than Superior Plus. It trades about -0.06 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.03 per unit of risk. If you would invest 6,345 in BNP Paribas SA on September 12, 2024 and sell it today you would lose (374.00) from holding BNP Paribas SA or give up 5.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Superior Plus Corp
Performance |
| Timeline |
| BNP Paribas SA |
| Superior Plus Corp |
BNP Paribas and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Superior Plus
The main advantage of trading using opposite BNP Paribas and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| BNP Paribas vs. Superior Plus Corp | BNP Paribas vs. SIVERS SEMICONDUCTORS AB | BNP Paribas vs. CHINA HUARONG ENERHD 50 | BNP Paribas vs. NORDIC HALIBUT AS |
| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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