Correlation Between BNP PARIBAS and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both BNP PARIBAS and BNP Paribas 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 BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP PARIBAS ADR and BNP Paribas SA, you can compare the effects of market volatilities on BNP PARIBAS and BNP Paribas 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 BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP PARIBAS and BNP Paribas.
Diversification Opportunities for BNP PARIBAS and BNP Paribas
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BNP and BNP is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BNP PARIBAS ADR and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas 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 ADR are associated (or correlated) with BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of BNP PARIBAS i.e., BNP PARIBAS and BNP Paribas go up and down completely randomly.
Pair Corralation between BNP PARIBAS and BNP Paribas
Assuming the 90 days trading horizon BNP PARIBAS ADR is expected to generate 1.08 times more return on investment than BNP Paribas. However, BNP PARIBAS is 1.08 times more volatile than BNP Paribas SA. It trades about 0.03 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.01 per unit of risk. If you would invest 2,820 in BNP PARIBAS ADR on September 26, 2024 and sell it today you would earn a total of 20.00 from holding BNP PARIBAS ADR or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP PARIBAS ADR vs. BNP Paribas SA
Performance |
| Timeline |
| BNP PARIBAS ADR |
| BNP Paribas SA |
BNP PARIBAS and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP PARIBAS and BNP Paribas
The main advantage of trading using opposite BNP PARIBAS and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP PARIBAS position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| BNP PARIBAS vs. BNP Paribas SA | BNP PARIBAS vs. Intesa Sanpaolo SpA | BNP PARIBAS vs. Lloyds Banking Group | BNP PARIBAS vs. Lloyds Banking Group |
| BNP Paribas vs. BNP PARIBAS ADR | BNP Paribas vs. Intesa Sanpaolo SpA | BNP Paribas vs. Lloyds Banking Group | BNP Paribas vs. Lloyds Banking Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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