Correlation Between BNP Paribas and SouthPoint Bancshares
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and SouthPoint Bancshares 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 SouthPoint Bancshares 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 SouthPoint Bancshares, you can compare the effects of market volatilities on BNP Paribas and SouthPoint Bancshares 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 SouthPoint Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and SouthPoint Bancshares.
Diversification Opportunities for BNP Paribas and SouthPoint Bancshares
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BNP and SouthPoint is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and SouthPoint Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SouthPoint 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 SouthPoint Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SouthPoint Bancshares has no effect on the direction of BNP Paribas i.e., BNP Paribas and SouthPoint Bancshares go up and down completely randomly.
Pair Corralation between BNP Paribas and SouthPoint Bancshares
Assuming the 90 days horizon BNP Paribas SA is expected to generate 1.23 times more return on investment than SouthPoint Bancshares. However, BNP Paribas is 1.23 times more volatile than SouthPoint Bancshares. It trades about 0.03 of its potential returns per unit of risk. SouthPoint Bancshares is currently generating about 0.03 per unit of risk. If you would invest 2,489 in BNP Paribas SA on September 3, 2024 and sell it today you would earn a total of 495.00 from holding BNP Paribas SA or generate 19.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNP Paribas SA vs. SouthPoint Bancshares
Performance |
| Timeline |
| BNP Paribas SA |
| SouthPoint Bancshares |
BNP Paribas and SouthPoint Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and SouthPoint Bancshares
The main advantage of trading using opposite BNP Paribas and SouthPoint Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, SouthPoint Bancshares 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 SouthPoint Bancshares will offset losses from the drop in SouthPoint Bancshares' 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 |
| SouthPoint Bancshares vs. United Bancorporation of | SouthPoint Bancshares vs. Touchmark Bancshares | SouthPoint Bancshares vs. South Atlantic Bancshares | SouthPoint Bancshares vs. Solera National 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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