Correlation Between BNP Paribas and Bank of San

Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Bank of San 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 Bank of San 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 Bank of San, you can compare the effects of market volatilities on BNP Paribas and Bank of San 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 Bank of San. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Bank of San.

Diversification Opportunities for BNP Paribas and Bank of San

-0.73

Correlation Coefficient

BNP Paribas  Bank of San

Pay attention - limited upside

The 3 months correlation between BNP and Bank is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Bank of San in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of San 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 Bank of San. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of San has no effect on the direction of BNP Paribas i.e., BNP Paribas and Bank of San go up and down completely randomly.

Pair Corralation between BNP Paribas and Bank of San

Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the Bank of San. In addition to that, BNP Paribas is 4.25 times more volatile than Bank of San. It trades about -0.12 of its total potential returns per unit of risk. Bank of San is currently generating about 0.33 per unit of volatility. If you would invest  3,115  in Bank of San on October 8, 2024 and sell it today you would earn a total of  85.00  from holding Bank of San or generate 2.73% return on investment over 90 days.

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

BNP Paribas SA  vs.  Bank of San

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Bank of San

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of San are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Bank of San may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BNP Paribas and Bank of San

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

The idea behind BNP Paribas SA and Bank of San 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.