Correlation Between BNP Paribas and Kko International

Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Kko International 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 BNP Paribas and Kko International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BNP Paribas SA and Kko International SA, you can compare the effects of market volatilities on BNP Paribas and Kko International 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 BNP Paribas with a short position of Kko International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Kko International.

Diversification Opportunities for BNP Paribas and Kko International

-0.72

Correlation Coefficient

BNP Paribas  Kko International

Pay attention - limited upside

The 3 months correlation between BNP and Kko is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Kko International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kko International and BNP Paribas 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 BNP Paribas SA are associated (or correlated) with Kko International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kko International has no effect on the direction of BNP Paribas i.e., BNP Paribas and Kko International go up and down completely randomly.

Pair Corralation between BNP Paribas and Kko International

Assuming the 90 days trading horizon BNP Paribas is expected to generate 11.36 times less return on investment than Kko International. But when comparing it to its historical volatility, BNP Paribas SA is 5.06 times less risky than Kko International. It trades about 0.23 of its potential returns per unit of risk. Kko International SA is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Kko International SA on October 5, 2024 and sell it today you would earn a total of  8.00  from holding Kko International SA or generate 72.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

BNP Paribas SA  vs.  Kko International SA

BNP Paribas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNP Paribas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BNP Paribas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kko International

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kko International SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kko International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BNP Paribas and Kko International

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

The idea behind BNP Paribas SA and Kko International 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.