Correlation Between Societe Generale and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Societe Generale 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 Societe Generale and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe Generale ADR and BNP Paribas SA, you can compare the effects of market volatilities on Societe Generale 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 Societe Generale with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and BNP Paribas.
Diversification Opportunities for Societe Generale and BNP Paribas
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Societe and BNP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale ADR 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 Societe Generale 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 Societe Generale ADR 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 Societe Generale i.e., Societe Generale and BNP Paribas go up and down completely randomly.
Pair Corralation between Societe Generale and BNP Paribas
Assuming the 90 days horizon Societe Generale ADR is expected to generate 1.7 times more return on investment than BNP Paribas. However, Societe Generale is 1.7 times more volatile than BNP Paribas SA. It trades about 0.15 of its potential returns per unit of risk. BNP Paribas SA is currently generating about -0.34 per unit of risk. If you would invest 520.00 in Societe Generale ADR on August 24, 2024 and sell it today you would earn a total of 47.00 from holding Societe Generale ADR or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Societe Generale ADR vs. BNP Paribas SA
Performance |
| Timeline |
| Societe Generale ADR |
| BNP Paribas SA |
Societe Generale and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe Generale and BNP Paribas
The main advantage of trading using opposite Societe Generale and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale 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.| Societe Generale vs. Invesco High Income | Societe Generale vs. Blackrock Muniholdings Ny | Societe Generale vs. MFS Investment Grade | Societe Generale vs. Federated Premier Municipal |
| BNP Paribas vs. Societe Generale ADR | BNP Paribas vs. Intesa Sanpaolo SpA | BNP Paribas vs. Commerzbank AG PK | BNP Paribas vs. Swedbank AB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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