Correlation Between Banque Nationale and Celyad SA

Can any of the company-specific risk be diversified away by investing in both Banque Nationale and Celyad SA 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 Banque Nationale and Celyad SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banque nationale de and Celyad SA, you can compare the effects of market volatilities on Banque Nationale and Celyad SA 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 Banque Nationale with a short position of Celyad SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Nationale and Celyad SA.

Diversification Opportunities for Banque Nationale and Celyad SA

0.65

Correlation Coefficient

Banque Nationale  Celyad SA

Poor diversification

The 3 months correlation between Banque and Celyad is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Banque nationale de and Celyad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celyad SA and Banque Nationale 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 Banque nationale de are associated (or correlated) with Celyad SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celyad SA has no effect on the direction of Banque Nationale i.e., Banque Nationale and Celyad SA go up and down completely randomly.

Pair Corralation between Banque Nationale and Celyad SA

Assuming the 90 days trading horizon Banque nationale de is expected to under-perform the Celyad SA. But the stock apears to be less risky and, when comparing its historical volatility, Banque nationale de is 3.78 times less risky than Celyad SA. The stock trades about -0.02 of its potential returns per unit of risk. The Celyad SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  71.00  in Celyad SA on December 30, 2024 and sell it today you would lose (16.00) from holding Celyad SA or give up 22.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Banque nationale de  vs.  Celyad SA

Banque nationale

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banque nationale de has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Banque Nationale is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Celyad SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celyad SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Celyad SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Banque Nationale and Celyad SA

The main advantage of trading using opposite Banque Nationale and Celyad SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banque Nationale position performs unexpectedly, Celyad SA 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 Celyad SA will offset losses from the drop in Celyad SA's long position.

The idea behind Banque nationale de and Celyad SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.