Correlation Between BNP Paribas and Reckitt Benckiser
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Reckitt Benckiser 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 Reckitt Benckiser 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 Reckitt Benckiser Group, you can compare the effects of market volatilities on BNP Paribas and Reckitt Benckiser 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 Reckitt Benckiser. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Reckitt Benckiser.
Diversification Opportunities for BNP Paribas and Reckitt Benckiser
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BNP and Reckitt is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Reckitt Benckiser Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reckitt Benckiser 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 Reckitt Benckiser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reckitt Benckiser has no effect on the direction of BNP Paribas i.e., BNP Paribas and Reckitt Benckiser go up and down completely randomly.
Pair Corralation between BNP Paribas and Reckitt Benckiser
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Reckitt Benckiser. In addition to that, BNP Paribas is 1.43 times more volatile than Reckitt Benckiser Group. It trades about -0.4 of its total potential returns per unit of risk. Reckitt Benckiser Group is currently generating about -0.15 per unit of volatility. If you would invest 1,287 in Reckitt Benckiser Group on September 2, 2024 and sell it today you would lose (45.00) from holding Reckitt Benckiser Group or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Reckitt Benckiser Group
Performance |
| Timeline |
| BNP Paribas SA |
| Reckitt Benckiser |
BNP Paribas and Reckitt Benckiser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Reckitt Benckiser
The main advantage of trading using opposite BNP Paribas and Reckitt Benckiser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Reckitt Benckiser 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 Reckitt Benckiser will offset losses from the drop in Reckitt Benckiser'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 |
| Reckitt Benckiser vs. LOral SA | Reckitt Benckiser vs. LOreal Co ADR | Reckitt Benckiser vs. Unilever PLC ADR | Reckitt Benckiser vs. Kimberly Clark |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |