Correlation Between BNP Paribas and DBS Group
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and DBS Group 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 DBS Group 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 DBS Group Holdings, you can compare the effects of market volatilities on BNP Paribas and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and DBS Group.
Diversification Opportunities for BNP Paribas and DBS Group
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and DBS is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of BNP Paribas i.e., BNP Paribas and DBS Group go up and down completely randomly.
Pair Corralation between BNP Paribas and DBS Group
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the DBS Group. In addition to that, BNP Paribas is 1.13 times more volatile than DBS Group Holdings. It trades about -0.14 of its total potential returns per unit of risk. DBS Group Holdings is currently generating about 0.17 per unit of volatility. If you would invest 10,785 in DBS Group Holdings on August 28, 2024 and sell it today you would earn a total of 1,712 from holding DBS Group Holdings or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
BNP Paribas SA vs. DBS Group Holdings
Performance |
| Timeline |
| BNP Paribas SA |
| DBS Group Holdings |
BNP Paribas and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and DBS Group
The main advantage of trading using opposite BNP Paribas and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group'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 |
| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
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 Stocks Directory module to find actively traded stocks across global markets.
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