Correlation Between BNP Paribas and Israel Discount
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Israel Discount 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 Israel Discount 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 Israel Discount Bank, you can compare the effects of market volatilities on BNP Paribas and Israel Discount 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 Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Israel Discount.
Diversification Opportunities for BNP Paribas and Israel Discount
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNP and Israel is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank 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 Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of BNP Paribas i.e., BNP Paribas and Israel Discount go up and down completely randomly.
Pair Corralation between BNP Paribas and Israel Discount
Assuming the 90 days horizon BNP Paribas is expected to generate 5.16 times less return on investment than Israel Discount. But when comparing it to its historical volatility, BNP Paribas SA is 3.24 times less risky than Israel Discount. It trades about 0.02 of its potential returns per unit of risk. Israel Discount Bank is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,766 in Israel Discount Bank on November 2, 2024 and sell it today you would earn a total of 1,434 from holding Israel Discount Bank or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.96% |
| Values | Daily Returns |
BNP Paribas SA vs. Israel Discount Bank
Performance |
| Timeline |
| BNP Paribas SA |
| Israel Discount Bank |
BNP Paribas and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Israel Discount
The main advantage of trading using opposite BNP Paribas and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Israel Discount 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 Israel Discount will offset losses from the drop in Israel Discount'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 |
| Israel Discount vs. Baraboo Bancorporation | Israel Discount vs. Schweizerische Nationalbank | Israel Discount vs. Danske Bank AS | Israel Discount vs. Absa Group Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |