Correlation Between Bank of Georgia and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Bank of Georgia 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 of Georgia 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 of Georgia and BNP Paribas SA, you can compare the effects of market volatilities on Bank of Georgia 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 of Georgia with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Georgia and BNP Paribas.
Diversification Opportunities for Bank of Georgia and BNP Paribas
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and BNP is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Georgia and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and Bank of Georgia 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 of Georgia 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 SA has no effect on the direction of Bank of Georgia i.e., Bank of Georgia and BNP Paribas go up and down completely randomly.
Pair Corralation between Bank of Georgia and BNP Paribas
Assuming the 90 days horizon Bank of Georgia is expected to under-perform the BNP Paribas. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank of Georgia is 18.82 times less risky than BNP Paribas. The pink sheet trades about -0.16 of its potential returns per unit of risk. The BNP Paribas SA is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 2,997 in BNP Paribas SA on January 25, 2024 and sell it today you would earn a total of 649.00 from holding BNP Paribas SA or generate 21.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.62% |
Values | Daily Returns |
Bank of Georgia vs. BNP Paribas SA
Performance |
Timeline |
Bank of Georgia |
BNP Paribas SA |
Bank of Georgia and BNP Paribas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Georgia and BNP Paribas
The main advantage of trading using opposite Bank of Georgia and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Georgia 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.Bank of Georgia vs. Bank Rakyat | Bank of Georgia vs. Lloyds Banking Group | Bank of Georgia vs. Western Alliance Bancorporation | Bank of Georgia vs. JAPAN POST BANK |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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