Correlation Between BNP Paribas and Truxton
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Truxton 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 Truxton 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 Truxton, you can compare the effects of market volatilities on BNP Paribas and Truxton 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 Truxton. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Truxton.
Diversification Opportunities for BNP Paribas and Truxton
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BNP and Truxton is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Truxton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truxton 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 Truxton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truxton has no effect on the direction of BNP Paribas i.e., BNP Paribas and Truxton go up and down completely randomly.
Pair Corralation between BNP Paribas and Truxton
Assuming the 90 days horizon BNP Paribas SA is expected to generate 1.91 times more return on investment than Truxton. However, BNP Paribas is 1.91 times more volatile than Truxton. It trades about 0.03 of its potential returns per unit of risk. Truxton is currently generating about 0.03 per unit of risk. If you would invest 5,902 in BNP Paribas SA on November 2, 2024 and sell it today you would earn a total of 948.00 from holding BNP Paribas SA or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
BNP Paribas SA vs. Truxton
Performance |
| Timeline |
| BNP Paribas SA |
| Truxton |
BNP Paribas and Truxton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Truxton
The main advantage of trading using opposite BNP Paribas and Truxton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Truxton 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 Truxton will offset losses from the drop in Truxton'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 |
| Truxton vs. Southern Michigan Bancorp | Truxton vs. Heartland Banccorp | Truxton vs. Woodlands Financial Services | Truxton vs. Exchange Bank |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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