Correlation Between AXA SA and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both AXA SA and BNP Paribas 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 AXA SA and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and BNP Paribas SA, you can compare the effects of market volatilities on AXA SA and BNP Paribas 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 AXA SA with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and BNP Paribas.
Diversification Opportunities for AXA SA and BNP Paribas
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXA and BNP is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and AXA SA 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 AXA SA are associated (or correlated) with BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of AXA SA i.e., AXA SA and BNP Paribas go up and down completely randomly.
Pair Corralation between AXA SA and BNP Paribas
Assuming the 90 days horizon AXA SA is expected to generate 0.73 times more return on investment than BNP Paribas. However, AXA SA is 1.36 times less risky than BNP Paribas. It trades about 0.06 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.04 per unit of risk. If you would invest 2,417 in AXA SA on August 28, 2024 and sell it today you would earn a total of 990.00 from holding AXA SA or generate 40.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. BNP Paribas SA
Performance |
| Timeline |
| AXA SA |
| BNP Paribas SA |
AXA SA and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and BNP Paribas
The main advantage of trading using opposite AXA SA and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| AXA SA vs. BNP Paribas SA | AXA SA vs. Sanofi SA | AXA SA vs. Credit Agricole SA | AXA SA vs. Societe Generale SA |
| BNP Paribas vs. Societe Generale SA | BNP Paribas vs. Credit Agricole SA | BNP Paribas vs. AXA SA | BNP Paribas vs. Sanofi SA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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