Correlation Between BNP Paribas and Japan Post
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Japan Post 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 Japan Post 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 Japan Post Holdings, you can compare the effects of market volatilities on BNP Paribas and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Japan Post.
Diversification Opportunities for BNP Paribas and Japan Post
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BNP and Japan is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Japan Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Holdings 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 Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Holdings has no effect on the direction of BNP Paribas i.e., BNP Paribas and Japan Post go up and down completely randomly.
Pair Corralation between BNP Paribas and Japan Post
If you would invest 1,036 in Japan Post Holdings on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Japan Post Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
BNP Paribas SA vs. Japan Post Holdings
Performance |
| Timeline |
| BNP Paribas SA |
| Japan Post Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BNP Paribas and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Japan Post
The main advantage of trading using opposite BNP Paribas and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.The idea behind BNP Paribas SA and Japan Post Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Japan Post vs. Huntington Bancshares Incorporated | Japan Post vs. Fifth Third Bancorp | Japan Post vs. MT Bank | Japan Post vs. Citizens Financial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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