Correlation Between BNP Paribas and Overseas Chinese
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Overseas Chinese 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 Overseas Chinese 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 Overseas Chinese Banking, you can compare the effects of market volatilities on BNP Paribas and Overseas Chinese 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 Overseas Chinese. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Overseas Chinese.
Diversification Opportunities for BNP Paribas and Overseas Chinese
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and Overseas is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Overseas Chinese Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overseas Chinese Banking 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 Overseas Chinese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overseas Chinese Banking has no effect on the direction of BNP Paribas i.e., BNP Paribas and Overseas Chinese go up and down completely randomly.
Pair Corralation between BNP Paribas and Overseas Chinese
Assuming the 90 days horizon BNP Paribas is expected to generate 2.49 times less return on investment than Overseas Chinese. In addition to that, BNP Paribas is 1.41 times more volatile than Overseas Chinese Banking. It trades about 0.02 of its total potential returns per unit of risk. Overseas Chinese Banking is currently generating about 0.07 per unit of volatility. If you would invest 1,744 in Overseas Chinese Banking on October 21, 2024 and sell it today you would earn a total of 762.00 from holding Overseas Chinese Banking or generate 43.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Overseas Chinese Banking
Performance |
| Timeline |
| BNP Paribas SA |
| Overseas Chinese Banking |
BNP Paribas and Overseas Chinese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Overseas Chinese
The main advantage of trading using opposite BNP Paribas and Overseas Chinese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Overseas Chinese 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 Overseas Chinese will offset losses from the drop in Overseas Chinese'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 |
| Overseas Chinese vs. Swedbank AB | Overseas Chinese vs. KBC Groep NV | Overseas Chinese vs. Nordea Bank Abp | Overseas Chinese vs. DBS Group Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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