Correlation Between BNP Paribas and Summit Bank
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Summit 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 Summit 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 Summit Bank Group, you can compare the effects of market volatilities on BNP Paribas and Summit 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 Summit Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Summit Bank.
Diversification Opportunities for BNP Paribas and Summit Bank
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and Summit is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Summit Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bank Group 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 Summit Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bank Group has no effect on the direction of BNP Paribas i.e., BNP Paribas and Summit Bank go up and down completely randomly.
Pair Corralation between BNP Paribas and Summit Bank
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Summit Bank. But the otc stock apears to be less risky and, when comparing its historical volatility, BNP Paribas SA is 5.96 times less risky than Summit Bank. The otc stock trades about -0.03 of its potential returns per unit of risk. The Summit Bank Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,430 in Summit Bank Group on October 11, 2024 and sell it today you would lose (20.00) from holding Summit Bank Group or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Summit Bank Group
Performance |
| Timeline |
| BNP Paribas SA |
| Summit Bank Group |
BNP Paribas and Summit Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Summit Bank
The main advantage of trading using opposite BNP Paribas and Summit Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Summit 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 Summit Bank will offset losses from the drop in Summit 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 |
| Summit Bank vs. Savi Financial | Summit Bank vs. Pacific West Bancorp | Summit Bank vs. Commencement Bancorp | Summit Bank vs. Merchants Marine Bancorp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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