Correlation Between BNP Paribas and Century Next
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Century Next 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 Century Next 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 Century Next Financial, you can compare the effects of market volatilities on BNP Paribas and Century Next 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 Century Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Century Next.
Diversification Opportunities for BNP Paribas and Century Next
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNP and Century is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Century Next Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Next Financial 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 Century Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Next Financial has no effect on the direction of BNP Paribas i.e., BNP Paribas and Century Next go up and down completely randomly.
Pair Corralation between BNP Paribas and Century Next
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Century Next. In addition to that, BNP Paribas is 3.87 times more volatile than Century Next Financial. It trades about -0.34 of its total potential returns per unit of risk. Century Next Financial is currently generating about 0.16 per unit of volatility. If you would invest 3,800 in Century Next Financial on August 29, 2024 and sell it today you would earn a total of 75.00 from holding Century Next Financial or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BNP Paribas SA vs. Century Next Financial
Performance |
| Timeline |
| BNP Paribas SA |
| Century Next Financial |
BNP Paribas and Century Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Century Next
The main advantage of trading using opposite BNP Paribas and Century Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Century Next 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 Century Next will offset losses from the drop in Century Next's long position.| BNP Paribas vs. Israel Discount Bank | BNP Paribas vs. Baraboo Bancorporation | BNP Paribas vs. Danske Bank AS | BNP Paribas vs. Jyske Bank AS |
| Century Next vs. Citizens Financial Corp | Century Next vs. Triad Business Bank | Century Next vs. First Ottawa Bancshares | Century Next vs. CCSB Financial 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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