Correlation Between BNP Paribas and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Bank Hapoalim 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 Bank Hapoalim 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 Bank Hapoalim ADR, you can compare the effects of market volatilities on BNP Paribas and Bank Hapoalim 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 Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Bank Hapoalim.
Diversification Opportunities for BNP Paribas and Bank Hapoalim
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BNP and Bank is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Bank Hapoalim ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim 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 Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim ADR has no effect on the direction of BNP Paribas i.e., BNP Paribas and Bank Hapoalim go up and down completely randomly.
Pair Corralation between BNP Paribas and Bank Hapoalim
Assuming the 90 days horizon BNP Paribas is expected to generate 5.29 times less return on investment than Bank Hapoalim. But when comparing it to its historical volatility, BNP Paribas SA is 1.61 times less risky than Bank Hapoalim. It trades about 0.02 of its potential returns per unit of risk. Bank Hapoalim ADR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,202 in Bank Hapoalim ADR on September 2, 2024 and sell it today you would earn a total of 1,611 from holding Bank Hapoalim ADR or generate 38.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.86% |
| Values | Daily Returns |
BNP Paribas SA vs. Bank Hapoalim ADR
Performance |
| Timeline |
| BNP Paribas SA |
| Bank Hapoalim ADR |
BNP Paribas and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Bank Hapoalim
The main advantage of trading using opposite BNP Paribas and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Bank Hapoalim 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 Bank Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| BNP Paribas vs. Societe Generale ADR | BNP Paribas vs. Intesa Sanpaolo SpA | BNP Paribas vs. Commerzbank AG PK | BNP Paribas vs. Swedbank AB |
| Bank Hapoalim vs. Piraeus Bank SA | Bank Hapoalim vs. Turkiye Garanti Bankasi | Bank Hapoalim vs. Uwharrie Capital Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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