Correlation Between BNP Paribas and South Atlantic
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and South Atlantic 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 South Atlantic 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 South Atlantic Bancshares, you can compare the effects of market volatilities on BNP Paribas and South Atlantic 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 South Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and South Atlantic.
Diversification Opportunities for BNP Paribas and South Atlantic
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and South is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and South Atlantic Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Atlantic Bancshares 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 South Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Atlantic Bancshares has no effect on the direction of BNP Paribas i.e., BNP Paribas and South Atlantic go up and down completely randomly.
Pair Corralation between BNP Paribas and South Atlantic
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the South Atlantic. But the otc stock apears to be less risky and, when comparing its historical volatility, BNP Paribas SA is 2.4 times less risky than South Atlantic. The otc stock trades about -0.51 of its potential returns per unit of risk. The South Atlantic Bancshares is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,428 in South Atlantic Bancshares on August 28, 2024 and sell it today you would earn a total of 114.00 from holding South Atlantic Bancshares or generate 7.98% 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. South Atlantic Bancshares
Performance |
| Timeline |
| BNP Paribas SA |
| South Atlantic Bancshares |
BNP Paribas and South Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and South Atlantic
The main advantage of trading using opposite BNP Paribas and South Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, South Atlantic 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 South Atlantic will offset losses from the drop in South Atlantic'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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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