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 BANK, 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
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNP and JAPAN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and JAPAN POST BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN POST BANK 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 BANK 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
Assuming the 90 days horizon BNP Paribas is expected to generate 3.59 times less return on investment than JAPAN POST. But when comparing it to its historical volatility, BNP Paribas SA is 1.27 times less risky than JAPAN POST. It trades about 0.01 of its potential returns per unit of risk. JAPAN POST BANK is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 915.00 in JAPAN POST BANK on November 1, 2024 and sell it today you would earn a total of 30.00 from holding JAPAN POST BANK or generate 3.28% 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. JAPAN POST BANK
Performance |
| Timeline |
| BNP Paribas SA |
| JAPAN POST BANK |
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.| BNP Paribas vs. Lloyds Banking Group | BNP Paribas vs. Bank of Hawaii | BNP Paribas vs. Deutsche Bank AG | BNP Paribas vs. PNC Financial Services |
| JAPAN POST vs. Bankinter SA ADR | JAPAN POST vs. First Horizon | JAPAN POST vs. JAPAN POST BANK | JAPAN POST vs. CaixaBank SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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