Correlation Between BNP Paribas and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA ADR, you can compare the effects of market volatilities on BNP Paribas and UniCredit SpA 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 UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and UniCredit SpA.
Diversification Opportunities for BNP Paribas and UniCredit SpA
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BNP and UniCredit is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and UniCredit SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA ADR 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 UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA ADR has no effect on the direction of BNP Paribas i.e., BNP Paribas and UniCredit SpA go up and down completely randomly.
Pair Corralation between BNP Paribas and UniCredit SpA
Assuming the 90 days horizon BNP Paribas is expected to generate 3.07 times less return on investment than UniCredit SpA. In addition to that, BNP Paribas is 1.04 times more volatile than UniCredit SpA ADR. It trades about 0.03 of its total potential returns per unit of risk. UniCredit SpA ADR is currently generating about 0.1 per unit of volatility. If you would invest 1,787 in UniCredit SpA ADR on January 14, 2025 and sell it today you would earn a total of 925.00 from holding UniCredit SpA ADR or generate 51.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. UniCredit SpA ADR
Performance |
| Timeline |
| BNP Paribas SA |
| UniCredit SpA ADR |
BNP Paribas and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and UniCredit SpA
The main advantage of trading using opposite BNP Paribas and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, UniCredit SpA 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 UniCredit SpA will offset losses from the drop in UniCredit SpA'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 |
| UniCredit SpA vs. Banco Bradesco SA | UniCredit SpA vs. Itau Unibanco Banco | UniCredit SpA vs. Lloyds Banking Group | UniCredit SpA vs. Deutsche Bank AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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