Correlation Between BNP Paribas and Oxford Bank
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Oxford Bank 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 Oxford Bank 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 Oxford Bank, you can compare the effects of market volatilities on BNP Paribas and Oxford Bank 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 Oxford Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Oxford Bank.
Diversification Opportunities for BNP Paribas and Oxford Bank
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and Oxford is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Oxford Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford 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 Oxford Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Bank has no effect on the direction of BNP Paribas i.e., BNP Paribas and Oxford Bank go up and down completely randomly.
Pair Corralation between BNP Paribas and Oxford Bank
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Oxford Bank. In addition to that, BNP Paribas is 2.25 times more volatile than Oxford Bank. It trades about -0.51 of its total potential returns per unit of risk. Oxford Bank is currently generating about 0.17 per unit of volatility. If you would invest 3,263 in Oxford Bank on August 28, 2024 and sell it today you would earn a total of 87.00 from holding Oxford Bank or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BNP Paribas SA vs. Oxford Bank
Performance |
| Timeline |
| BNP Paribas SA |
| Oxford Bank |
BNP Paribas and Oxford Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Oxford Bank
The main advantage of trading using opposite BNP Paribas and Oxford Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Oxford Bank 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 Oxford Bank will offset losses from the drop in Oxford Bank'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 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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