Correlation Between BNP Paribas and Societe Generale
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Societe Generale 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 Societe Generale 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 Societe Generale ADR, you can compare the effects of market volatilities on BNP Paribas and Societe Generale 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 Societe Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Societe Generale.
Diversification Opportunities for BNP Paribas and Societe Generale
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and Societe is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Societe Generale ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Societe Generale ADR 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 Societe Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Societe Generale ADR has no effect on the direction of BNP Paribas i.e., BNP Paribas and Societe Generale go up and down completely randomly.
Pair Corralation between BNP Paribas and Societe Generale
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Societe Generale. But the otc stock apears to be less risky and, when comparing its historical volatility, BNP Paribas SA is 1.54 times less risky than Societe Generale. The otc stock trades about -0.27 of its potential returns per unit of risk. The Societe Generale ADR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 515.00 in Societe Generale ADR on August 28, 2024 and sell it today you would earn a total of 21.00 from holding Societe Generale ADR or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. Societe Generale ADR
Performance |
| Timeline |
| BNP Paribas SA |
| Societe Generale ADR |
BNP Paribas and Societe Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Societe Generale
The main advantage of trading using opposite BNP Paribas and Societe Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Societe Generale 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 Societe Generale will offset losses from the drop in Societe Generale'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 |
| Societe Generale vs. BNP Paribas SA | Societe Generale vs. Credit Agricole SA | Societe Generale vs. Intesa Sanpaolo SpA | Societe Generale vs. Commerzbank AG PK |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Transaction History View history of all your transactions and understand their impact on performance |