Correlation Between BNP Paribas and Community Bankers
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Community Bankers 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 Community Bankers 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 Community Bankers, you can compare the effects of market volatilities on BNP Paribas and Community Bankers 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 Community Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Community Bankers.
Diversification Opportunities for BNP Paribas and Community Bankers
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNP and Community is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Community Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Bankers 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 Community Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Bankers has no effect on the direction of BNP Paribas i.e., BNP Paribas and Community Bankers go up and down completely randomly.
Pair Corralation between BNP Paribas and Community Bankers
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Community Bankers. In addition to that, BNP Paribas is 3.17 times more volatile than Community Bankers. It trades about -0.34 of its total potential returns per unit of risk. Community Bankers is currently generating about 0.31 per unit of volatility. If you would invest 469.00 in Community Bankers on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Community Bankers or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Community Bankers
Performance |
| Timeline |
| BNP Paribas SA |
| Community Bankers |
BNP Paribas and Community Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Community Bankers
The main advantage of trading using opposite BNP Paribas and Community Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Community Bankers 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 Community Bankers will offset losses from the drop in Community Bankers' long position.| BNP Paribas vs. Lloyds Banking Group | BNP Paribas vs. Bank of Hawaii | BNP Paribas vs. Deutsche Bank AG | BNP Paribas vs. PNC Financial Services |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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