Correlation Between Reckitt Benckiser and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Reckitt Benckiser 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 Reckitt Benckiser and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reckitt Benckiser Group and BNP Paribas SA, you can compare the effects of market volatilities on Reckitt Benckiser 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 Reckitt Benckiser with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reckitt Benckiser and BNP Paribas.
Diversification Opportunities for Reckitt Benckiser and BNP Paribas
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Reckitt and BNP is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Reckitt Benckiser Group 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 Reckitt Benckiser 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 Reckitt Benckiser Group 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 Reckitt Benckiser i.e., Reckitt Benckiser and BNP Paribas go up and down completely randomly.
Pair Corralation between Reckitt Benckiser and BNP Paribas
Assuming the 90 days horizon Reckitt Benckiser Group is expected to under-perform the BNP Paribas. In addition to that, Reckitt Benckiser is 1.12 times more volatile than BNP Paribas SA. It trades about -0.02 of its total potential returns per unit of risk. BNP Paribas SA is currently generating about 0.01 per unit of volatility. If you would invest 2,889 in BNP Paribas SA on August 31, 2024 and sell it today you would earn a total of 96.00 from holding BNP Paribas SA or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reckitt Benckiser Group vs. BNP Paribas SA
Performance |
| Timeline |
| Reckitt Benckiser |
| BNP Paribas SA |
Reckitt Benckiser and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reckitt Benckiser and BNP Paribas
The main advantage of trading using opposite Reckitt Benckiser and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reckitt Benckiser 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.| Reckitt Benckiser vs. LOral SA | Reckitt Benckiser vs. LOreal Co ADR | Reckitt Benckiser vs. Unilever PLC ADR | Reckitt Benckiser vs. Kimberly Clark |
| BNP Paribas vs. HUMANA INC | BNP Paribas vs. SCOR PK | BNP Paribas vs. Aquagold International | BNP Paribas vs. Thrivent High Yield |
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..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |