Correlation Between BNP Paribas and Pinnacle Bank
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Pinnacle Bank 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 Pinnacle Bank 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 Pinnacle Bank, you can compare the effects of market volatilities on BNP Paribas and Pinnacle Bank 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 Pinnacle Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Pinnacle Bank.
Diversification Opportunities for BNP Paribas and Pinnacle Bank
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNP and Pinnacle is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Pinnacle Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle 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 Pinnacle Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Bank has no effect on the direction of BNP Paribas i.e., BNP Paribas and Pinnacle Bank go up and down completely randomly.
Pair Corralation between BNP Paribas and Pinnacle Bank
Assuming the 90 days horizon BNP Paribas is expected to generate 1.62 times less return on investment than Pinnacle Bank. In addition to that, BNP Paribas is 2.05 times more volatile than Pinnacle Bank. It trades about 0.03 of its total potential returns per unit of risk. Pinnacle Bank is currently generating about 0.11 per unit of volatility. If you would invest 1,400 in Pinnacle Bank on October 21, 2024 and sell it today you would earn a total of 510.00 from holding Pinnacle Bank or generate 36.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.58% |
| Values | Daily Returns |
BNP Paribas SA vs. Pinnacle Bank
Performance |
| Timeline |
| BNP Paribas SA |
| Pinnacle Bank |
BNP Paribas and Pinnacle Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Pinnacle Bank
The main advantage of trading using opposite BNP Paribas and Pinnacle Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Pinnacle Bank 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 Pinnacle Bank will offset losses from the drop in Pinnacle Bank'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 |
| Pinnacle Bank vs. Truist Financial Corp | Pinnacle Bank vs. PNC Financial Services | Pinnacle Bank vs. KeyCorp | Pinnacle Bank vs. Western Alliance Bancorporation |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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