Correlation Between BNP Paribas and Private Bancorp

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

Diversification Opportunities for BNP Paribas and Private Bancorp

-0.37

Correlation Coefficient

BNP Paribas  Private Bancorp

Very good diversification

The 3 months correlation between BNP and Private is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas SA and Private Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Private 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 Private Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Private Bancorp has no effect on the direction of BNP Paribas i.e., BNP Paribas and Private Bancorp go up and down completely randomly.

Pair Corralation between BNP Paribas and Private Bancorp

Assuming the 90 days horizon BNP Paribas SA is expected to generate 2.07 times more return on investment than Private Bancorp. However, BNP Paribas is 2.07 times more volatile than Private Bancorp of. It trades about 0.33 of its potential returns per unit of risk. Private Bancorp of is currently generating about -0.07 per unit of risk. If you would invest  3,073  in BNP Paribas SA on December 28, 2024 and sell it today you would earn a total of  1,232  from holding BNP Paribas SA or generate 40.09% return on investment over 90 days.

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

BNP Paribas SA  vs.  Private Bancorp of

BNP Paribas SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BNP Paribas SA are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BNP Paribas showed solid returns over the last few months and may actually be approaching a breakup point.

Private Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Private Bancorp of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Private Bancorp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BNP Paribas and Private Bancorp

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

The idea behind BNP Paribas SA and Private Bancorp of 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.