Correlation Between BNP Paribas and Popular
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Popular 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 Popular 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 Popular, you can compare the effects of market volatilities on BNP Paribas and Popular 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 Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Popular.
Diversification Opportunities for BNP Paribas and Popular
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BNP and Popular is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular 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 Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of BNP Paribas i.e., BNP Paribas and Popular go up and down completely randomly.
Pair Corralation between BNP Paribas and Popular
Assuming the 90 days horizon BNP Paribas SA is expected to generate 1.26 times more return on investment than Popular. However, BNP Paribas is 1.26 times more volatile than Popular. It trades about 0.06 of its potential returns per unit of risk. Popular is currently generating about 0.03 per unit of risk. If you would invest 2,774 in BNP Paribas SA on November 3, 2024 and sell it today you would earn a total of 634.00 from holding BNP Paribas SA or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.57% |
| Values | Daily Returns |
BNP Paribas SA vs. Popular
Performance |
| Timeline |
| BNP Paribas SA |
| Popular |
BNP Paribas and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Popular
The main advantage of trading using opposite BNP Paribas and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Popular 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 Popular will offset losses from the drop in Popular'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 |
| Popular vs. Penns Woods Bancorp | Popular vs. 1st Source | Popular vs. Great Southern Bancorp | Popular vs. Waterstone Financial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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