Correlation Between BNP Paribas and Southeastern Banking
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Southeastern Banking 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 Southeastern Banking 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 Southeastern Banking Corp, you can compare the effects of market volatilities on BNP Paribas and Southeastern Banking 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 Southeastern Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Southeastern Banking.
Diversification Opportunities for BNP Paribas and Southeastern Banking
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BNP and Southeastern is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Southeastern Banking Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southeastern Banking Corp 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 Southeastern Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southeastern Banking Corp has no effect on the direction of BNP Paribas i.e., BNP Paribas and Southeastern Banking go up and down completely randomly.
Pair Corralation between BNP Paribas and Southeastern Banking
Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Southeastern Banking. But the otc stock apears to be less risky and, when comparing its historical volatility, BNP Paribas SA is 1.17 times less risky than Southeastern Banking. The otc stock trades about -0.1 of its potential returns per unit of risk. The Southeastern Banking Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,952 in Southeastern Banking Corp on August 29, 2024 and sell it today you would earn a total of 422.00 from holding Southeastern Banking Corp or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
BNP Paribas SA vs. Southeastern Banking Corp
Performance |
| Timeline |
| BNP Paribas SA |
| Southeastern Banking Corp |
BNP Paribas and Southeastern Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Southeastern Banking
The main advantage of trading using opposite BNP Paribas and Southeastern Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Southeastern Banking 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 Southeastern Banking will offset losses from the drop in Southeastern Banking's long position.| BNP Paribas vs. Invesco High Income | BNP Paribas vs. Blackrock Muniholdings Ny | BNP Paribas vs. Nuveen California Select | BNP Paribas vs. MFS Investment Grade |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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