Correlation Between BNP Paribas and CCCB Bancorp

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

Diversification Opportunities for BNP Paribas and CCCB Bancorp

-0.78

Correlation Coefficient

BNP Paribas  CCCB Bancorp

Pay attention - limited upside

The 3 months correlation between BNP and CCCB is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and CCCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCCB Bancorp 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 CCCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCCB Bancorp has no effect on the direction of BNP Paribas i.e., BNP Paribas and CCCB Bancorp go up and down completely randomly.

Pair Corralation between BNP Paribas and CCCB Bancorp

Assuming the 90 days horizon BNP Paribas SA is expected to under-perform the CCCB Bancorp. But the otc stock apears to be less risky and, when comparing its historical volatility, BNP Paribas SA is 1.84 times less risky than CCCB Bancorp. The otc stock trades about -0.11 of its potential returns per unit of risk. The CCCB Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  492.00  in CCCB Bancorp on September 13, 2024 and sell it today you would earn a total of  35.00  from holding CCCB Bancorp or generate 7.11% 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.  CCCB Bancorp

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. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CCCB Bancorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CCCB Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CCCB Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BNP Paribas and CCCB Bancorp

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

The idea behind BNP Paribas SA and CCCB Bancorp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.