Correlation Between BNP PARIBAS and Crdit Agricole
Can any of the company-specific risk be diversified away by investing in both BNP PARIBAS and Crdit Agricole 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 Crdit Agricole 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 Crdit Agricole SA, you can compare the effects of market volatilities on BNP PARIBAS and Crdit Agricole 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 Crdit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP PARIBAS and Crdit Agricole.
Diversification Opportunities for BNP PARIBAS and Crdit Agricole
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BNP and Crdit is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding BNP PARIBAS ADR and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole 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 Crdit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of BNP PARIBAS i.e., BNP PARIBAS and Crdit Agricole go up and down completely randomly.
Pair Corralation between BNP PARIBAS and Crdit Agricole
Assuming the 90 days trading horizon BNP PARIBAS is expected to generate 1.01 times less return on investment than Crdit Agricole. But when comparing it to its historical volatility, BNP PARIBAS ADR is 1.12 times less risky than Crdit Agricole. It trades about 0.38 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,323 in Crdit Agricole SA on November 1, 2024 and sell it today you would earn a total of 118.00 from holding Crdit Agricole SA or generate 8.92% 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. Crdit Agricole SA
Performance |
| Timeline |
| BNP PARIBAS ADR |
| Crdit Agricole SA |
BNP PARIBAS and Crdit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP PARIBAS and Crdit Agricole
The main advantage of trading using opposite BNP PARIBAS and Crdit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP PARIBAS position performs unexpectedly, Crdit Agricole 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 Crdit Agricole will offset losses from the drop in Crdit Agricole's long position.| BNP PARIBAS vs. BNP Paribas SA | BNP PARIBAS vs. Intesa Sanpaolo SpA | BNP PARIBAS vs. Lloyds Banking Group | BNP PARIBAS vs. Crdit Agricole SA |
| Crdit Agricole vs. FRACTAL GAMING GROUP | Crdit Agricole vs. Cars Inc | Crdit Agricole vs. TROPHY GAMES DEV | Crdit Agricole vs. Corsair Gaming |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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