Correlation Between Bank Ochrony and BNP Paribas

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

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

Diversification Opportunities for Bank Ochrony and BNP Paribas

0.86

Correlation Coefficient

Bank Ochrony  BNP Paribas

Very poor diversification

The 3 months correlation between Bank and BNP is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank Ochrony rodowiska and BNP Paribas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas Bank and Bank Ochrony 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 Bank Ochrony rodowiska are associated (or correlated) with BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas Bank has no effect on the direction of Bank Ochrony i.e., Bank Ochrony and BNP Paribas go up and down completely randomly.

Pair Corralation between Bank Ochrony and BNP Paribas

Assuming the 90 days trading horizon Bank Ochrony rodowiska is expected to generate 1.04 times more return on investment than BNP Paribas. However, Bank Ochrony is 1.04 times more volatile than BNP Paribas Bank. It trades about -0.13 of its potential returns per unit of risk. BNP Paribas Bank is currently generating about -0.19 per unit of risk. If you would invest  1,260  in Bank Ochrony rodowiska on August 31, 2024 and sell it today you would lose (210.00) from holding Bank Ochrony rodowiska or give up 16.67% of portfolio value over 90 days.

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

Bank Ochrony rodowiska  vs.  BNP Paribas Bank

Bank Ochrony rodowiska

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Ochrony rodowiska has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

BNP Paribas Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNP Paribas Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bank Ochrony and BNP Paribas

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

The idea behind Bank Ochrony rodowiska and BNP Paribas Bank 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.