Correlation Between Skandinaviska Enskilda and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda 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 Skandinaviska Enskilda and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skandinaviska Enskilda Banken and BNP Paribas SA, you can compare the effects of market volatilities on Skandinaviska Enskilda 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 Skandinaviska Enskilda with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and BNP Paribas.
Diversification Opportunities for Skandinaviska Enskilda and BNP Paribas
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skandinaviska and BNP is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken 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 Skandinaviska Enskilda 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 Skandinaviska Enskilda Banken 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 Skandinaviska Enskilda i.e., Skandinaviska Enskilda and BNP Paribas go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and BNP Paribas
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 211.0 times less return on investment than BNP Paribas. In addition to that, Skandinaviska Enskilda is 1.04 times more volatile than BNP Paribas SA. It trades about 0.0 of its total potential returns per unit of risk. BNP Paribas SA is currently generating about 0.07 per unit of volatility. If you would invest 5,634 in BNP Paribas SA on September 27, 2024 and sell it today you would earn a total of 92.00 from holding BNP Paribas SA or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. BNP Paribas SA
Performance |
| Timeline |
| Skandinaviska Enskilda |
| BNP Paribas SA |
Skandinaviska Enskilda and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and BNP Paribas
The main advantage of trading using opposite Skandinaviska Enskilda and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda 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.| Skandinaviska Enskilda vs. BNP Paribas SA | Skandinaviska Enskilda vs. BNP PARIBAS ADR | Skandinaviska Enskilda vs. Intesa Sanpaolo SpA | Skandinaviska Enskilda vs. Lloyds Banking Group |
| BNP Paribas vs. BNP PARIBAS ADR | BNP Paribas vs. Intesa Sanpaolo SpA | BNP Paribas vs. Lloyds Banking Group | BNP Paribas vs. Lloyds Banking Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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