Correlation Between Noble Financials and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Noble Financials 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 Noble Financials and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble Financials SA and BNP Paribas Bank, you can compare the effects of market volatilities on Noble Financials 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 Noble Financials with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Financials and BNP Paribas.
Diversification Opportunities for Noble Financials and BNP Paribas
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Noble and BNP is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Noble Financials SA and BNP Paribas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Bank and Noble Financials 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 Noble Financials 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 Bank has no effect on the direction of Noble Financials i.e., Noble Financials and BNP Paribas go up and down completely randomly.
Pair Corralation between Noble Financials and BNP Paribas
Assuming the 90 days trading horizon Noble Financials SA is expected to generate 2.73 times more return on investment than BNP Paribas. However, Noble Financials is 2.73 times more volatile than BNP Paribas Bank. It trades about 0.05 of its potential returns per unit of risk. BNP Paribas Bank is currently generating about 0.07 per unit of risk. If you would invest 4,000 in Noble Financials SA on November 1, 2024 and sell it today you would earn a total of 3,840 from holding Noble Financials SA or generate 96.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble Financials SA vs. BNP Paribas Bank
Performance |
| Timeline |
| Noble Financials |
| BNP Paribas Bank |
Noble Financials and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Financials and BNP Paribas
The main advantage of trading using opposite Noble Financials and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Financials 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.| Noble Financials vs. Quantum Software SA | Noble Financials vs. Gaming Factory SA | Noble Financials vs. GreenX Metals | Noble Financials vs. MCI Management SA |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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